Lender Genesis Global Capital, aimed at institutional investors, released a fresh quarterly report. For April to June, issuance of crypto loans reached a record $2.2 billion, bringing their outstanding balance to $1.4 billion by early July. The driver was yield farming.
Compared with the same period last year, the issuance of crypto loans in the second quarter rose by 324%, and year-to-date by 35.3%. Growth continued for a ninth consecutive quarter since the service was launched in March 2018. The year-to-date total stood at $8.4 billion.
The driver of the increase was not only the rise in Bitcoin and other coins in the second quarter, but also an increase in the number of loans denominated in crypto and in fiat at 6-12% per annum.
In the loan portfolio, the share of Bitcoin rose from 44.8% to 51.2%, driven by a decline in the fiat share from 36.6% to 32.0%. This could reflect lower Bitcoin volatility, making loans in it less risky. The Ethereum share rose from 5.6% to 7.4%, while the volume of loans in Bitcoin Cash (BCH) fell from 5.8% to 4.5%.
The Genesis chief executive does not expect the same standout momentum in the third quarter, given the high base set by a strong second quarter.
“To expect that our outstanding loans will double and keep rising would be short-sighted,” — said Genesis CEO Michael Moro.
The report noted that in the second quarter the volume of crypto trading rose from $4 billion in January-March to $5.25 billion, largely via OTC platforms. Trading in forwards and options across ten crypto assets during this period totalled $400 million.
The U.S. Securities and Exchange Commission intends to analyse the properties of functioning smart contracts underpinning the DeFi space.
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