Genesis Capital's Q3 Report: Surge in Cash and Stablecoin Lending

Genesis Capital on the Rise

In its third-quarter report, Genesis Capital, the digital asset lending branch sprouting from Genesis Global Trading, has posted a staggering $870 million in new loan originations. This impressive figure not only breaks the previous record of $746 million set in Q2 2019 but also shows a clear upward trend in demand for cash and stablecoin loans.

Cash and Stablecoins Steal the Show

According to Genesis Capital’s report, the growth of cash loans has been particularly remarkable, making up 31.2% of their active loan portfolio by the end of Q3. This is a leap from 23.5% in Q2 and 14% from the previous year. A well-crafted statement from the report puts it bluntly:

“Our loan portfolio largely sustained its value through increased cash (USD and stablecoin) loan issuance, offset by a decrease in the notional value of crypto loans outstanding.”

The report also confirms a sustained international clamor for USD borrowing, heavily relying on stablecoins like USD Coin (USDC) and Paxos Standard Token (PAX).

The Amazing Journey of Cash Loans

Genesis began the year with roughly $20 million in outstanding cash loans, nudging up to $40 million by the end of Q2. However, Q3 was a game-changer, skyrocketing cash loans outstanding to a dizzying high of $160 million in mid-September, before settling at around $140 million—likely impacted by a recent drop in Bitcoin’s value from $10,000 to $8,000.

Bitcoin Backseat: Decline in Loan Demand

In a twist that has many raising their eyebrows, Genesis has reported a decrease in the share of active Bitcoin loans, which dropped to 50.2% from 68.1% at the end of Q1. Here, the new issuance of U.S. dollars edged out Bitcoin loans, as altcoins like Ether (ETH) gained traction in Q3, climbing from less than 4% to 7.5% of the active portfolio.

New Partnerships and Expanding Horizons

Governments and corporations everywhere are keeping an eye on Genesis Capital, especially since the firm has joined forces with Bitcoin IRA. The partnership aims to provide investors avenues to earn interest on both cryptocurrency and cash. Bitcoin IRA COO Chris Kline sings the praises of this initiative:

“Borrowing and lending using cryptocurrencies and cash are providing new and safe opportunities for our clients to maximize the growth of their retirement accounts.”

This could be the cherry on top for clients, as interest earned could effectively offset those pesky trading and custodial fees.