Genesis Prime originated $2.3 billion in loans marking the ninth consecutive quarter of strong growth

Genesis Prime, one of the many firms vying for market share in the increasingly competitive crypto prime broker business, released their quarterly report outlining the state of their established lending arm along with new business lines. Loans originated topped $8.4 billion as originations reached new highs for the ninth straight quarter amid an expanding universe of yield opportunities. $2.3 billion in new loans marks a 17% increase over the prior quarter and 324% increase from the same quarter last year.

Genesis’ business was not isolated from the recent trend of yield farming where DeFi protocols subsidize liquidity by distributing native tokens to its users. A possible side effect of this is an increase in basis, or difference between futures and spot price, which results from the subsidized USD rates as traders can sell spot, to long futures and earn yield on cash from the spot sale.

Despite the subsidized cash lending, Genesis’ cash loans as a percent of their overall book declined from 36% to 32%. This comes as a result of a flat futures curve that incentivized traders to long basis by borrowing BTC, selling it spot while going long short-dated futures betting the curve will steepen.

Genesis traded $5.25 billion in Q2, up from $4.0 billion in the prior quarter. The newly created derivatives desk traded $400 million in notional volume with the majority comprised of BTC/USD products although they did trade options in many of the new up-and-coming DeFi governance tokens. The team highlighted some emerging trends they’re seeing in the trading world.

As crypto starts to become more institutionalized, prime brokers like Genesis have a pivotal role to play by servicing funds looking to get involved, providing them with a full suite of products they are accustomed to in the traditional financial world. While the market for primes has been increasingly competitive, Genesis is poised to remain a dominant player by continuing to grow at a rapid pace.