💸 [Analysis] Genesis Capital digital asset lending snapshot Q4 2018 - Matt Ballensweig and Roshun Patel

Genesis Capital issued its 2018 Q4 digital asset lending snapshot, showing an increase in loan activities across the board, largely correlated to Nov. 14th's cryptocurrency price crash. Loan origination increased 100% in the final three months of 2018 compared to the prior six months, likely due to liquidity demand for covering short positions by over the counter (OTC) exchanges. In light of this, Genesis Capital's Bitcoin ($BTC) holdings rose ten percent against other altcoins. The snapshot also noted both a 75% rise in Ethereum ($ETH) loan origination from Nov. 15-Dec. 15, 2018 and negative return rates from the loan origination rate till sale of the short position. In other words, Ethereum's extreme volatility makes it hard to short. Conversely, Bitcoin typically traded on basis during the same period, meaning traders had a fairly easy time arbitraging. Genesis also added fiat cash lending against cryptocurrency holdings for institutional investors to increase institutional liquidity and facilitate more asset purchases. Over 2018, Genesis processed nearly $1.1 billion in lends and borrows.