Coinbase Going Public Is A Watershed Moment for the Cryptocurrency Industry

Coinbase going public will be making some people very rich as institutions start to dominate exchange’s volumes, while CT was disappointed in the money-making crypto company having surprisingly small amounts of digital currencies in their treasury balance sheet.

Coinbase Global Inc. has filed with the US SEC for a direct listing on Nasdaq, and it has the crypto market excited, and the traditional markets are taking notice, as the financial statements of the company revealed that the exchange has been making a lot of money.

Interestingly, a good majority, 85% of the 130 companies that went public in the US last year, was unprofitable. But with Coinbase, the matter is altogether different.

San Francisco-based reported revenue of $1.28 billion in 2020 versus $533.7 million in 2019.

Given the record trading volume, the number of new users, as well as the crypto trading platforms it has been acquiring in just the two months of 2021 amidst the wild bull run, the revenue in the first quarter will be off the charts and is expected to surpass $2 billion, for the exchange.

This puts Coinbase with over a $100 billion valuation, more valuable than CME, ICE which owns the NYSE, CBOE, and Nasdaq.

ErikVoorheesCoinbase

Source: Twitter

This will certainly be making Coinbase CEO Brian Armstrong, and its top executives, rich by billions of dollars as a result of this valuation, which would make it one of the biggest companies to go public since the social media giant Facebook.

The CEO owns 21.8% of the company’s voting power, followed by a16z’s Marc Andreessen at 14.2%, who owns twice as many shares as Armstrong, and co-founder Fred Ehsram 9%. In total, the 11-member board has the majority voting control.

coinbase-shares

Source: SEC Filing

To be listed under the ticker COIN, Goldman Sachs, JPMorgan, and Citigroup are the market makers who are also the advisors on the transaction with another addition Allen & Co.

One of the largest exchanges, Coinbase, reported 43 million verified users, steady growth from 23 million in Q1 of 2018. As for the transacting users, in Q4 of 2020, it was 2.8 million, nearly the same as 1Q18 at 2.7 million.

Unlike the transacting users, in 1Q18, when the market topped, Coinbase recorded $56 billion in trading volume, but during the last quarter, it was $89 billion.

The big difference has been in Coinbase’s volume by customer segment, as back in Q1 of 2018, retail dominated the exchange with more than an 80% share; it has completely changed to institutional accounting for 64% of volume in 4Q20.

Exciting & Embarrassing

Crypto Twitter (CT) has been excited about this development as Matt Huang, Co-founder at Paradigm, previously a partner at Sequoia, congratulated the company, “The Coinbase S-1 is just one step along the way toward building a legendary company… but still, one hell of a milestone.”

“This represents another major milestone in the development of the cryptocurrency industry,” tweeted Jay Hao, CEO of crypto exchange OKEx. “Coinbase’s S-1 filing will undoubtedly have a profound impact on the crypto market and usher in a new era of mainstream crypto adoption,” he added.

RobertLeshnerCoinbase

Source: Twitter

What really set off the CT was the fact that Coinbase, which started in 2012 when the price of BItcoin was about $5, holds only $130 million worth of BTC.

Square’s recently announced the purchase of $170 million worth BTC is more than this, and Coinbase’s BTC stash is nowhere even near Michael Saylor’s $2.171 billion bet on Bitcoin.

Besides having 55% of their modest crypto treasury, separate from cash and cash equivalents at $1.1 billion, the company has $24 million (10%) in Ethereum ETH -5.02% Ethereum / USD ETHUSD $ 1,446.93
-$72.64-5.02%
Volume 31.49 b Change -$72.64 Open $1,446.93 Circulating 114.84 m Market Cap 166.16 b
6 h Crypto Hedge Fund Arca is the Latest to Join the Crowd of Bitcoin Trust Issuers 6 h Coinbase Going Public Is A Watershed Moment for the Cryptocurrency Industry 7 h 1Inch Decentralized Exchange to Transition to Binance Smart Chain as Ethereum Exodus Begins
, $49 million (20%) in USDC stablecoin USDC -0.02% USD Coin / USD USDCUSD $ 1.00
$0.00-0.02%
Volume 2.46 b Change $0.00 Open $1.00 Circulating 8.59 b Market Cap 8.59 b
6 h Coinbase Going Public Is A Watershed Moment for the Cryptocurrency Industry 1 w Private Aviation Company Sees 20% Revenue Coming from Bitcoin Paying Users 1 w You Can Now Buy Bitcoin with Apple Pay as BitPay Adds Support
, and $34 million (15%) in other altcoins.

Given that Coinbase is a cryptocurrency-centered company, some even called this crypto stash “embarrassing.”

But many expect Amrstong, Ehsram, and other early backers to own heavy Bitcoin BTC -4.15% Bitcoin / USD BTCUSD $ 46,344.77
-$1,923.31-4.15%
Volume 351 b Change -$1,923.31 Open $46,344.77 Circulating 18.64 m Market Cap 863.85 b
5 h A “BIG Deal:” Stone Ridge Files to Add Bitcoin to its Diversified Alternatives Fund 6 h Crypto Hedge Fund Arca is the Latest to Join the Crowd of Bitcoin Trust Issuers 6 h Coinbase Going Public Is A Watershed Moment for the Cryptocurrency Industry
and crypto bags personally.

Coinbase going public, meanwhile, is also expected to be bullish for other exchanges and their tokens. “I think the bigger the Coinbase IPO gets, the better for exchange tokens. Doesn’t matter that owning an exchange token ≠ actually owning stock. Just matters that a lot of people will feel priced out of coinbase” noted trader DonAlt.

As we reported, US-based Kraken is also planning to raise funds that could more than double its valuation and surpass $20 billion.

Interestingly, in its filing with the SEC, Coinbase also mentions that they do not maintain a headquarter as of May 2020 and that they have become a remote-first company.

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Author: AnTy

ECB President Says Central Banks Are ‘Very Unlikely’ to Add Bitcoin as a Reserve Asset

ECB President Says Central Banks Are ‘Very Unlikely’ to Add Bitcoin as a Reserve Asset

  • ECB President says central banks “are highly unlikely” to add Bitcoin (BTC) as an asset any time soon.
  • The digital euro is still in the works and could be released by 2024, she also said.

In a Business Insider report, European Central Bank (ECB) President, Christine Lagarde, repeated her skepticism on Bitcoin, stating central banks are not looking to add the digital asset as a reserve currency any time soon. During a call with The Economist, Lagarde again said BTC is not a real currency; hence central banks are “very unlikely” to add it to their balances.

“It’s very unlikely – I would say it’s out of the question,” Lagarde on whether central banks will add Bitcoin as a reserve asset.

These, however, are repetitive comments on Bitcoin from Lagarde, who has been against the coin since her appointment to the ECB. Earlier in the year, Lagarde released a statement warning against investment in Bitcoin – stating it is a highly speculative asset and could be used for “reprehensible” money laundering.

However, she believes that there’s room for digital currencies (such as the digital euro) to grow in the coming years. Due to the current global pandemic, governments across have taken a step towards digitization. Agreeing to ECB board members’ proposal, Lagarde stated the ECB is preparing a digital euro, which could be released in the coming four years.

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Author: Lujan Odera

Jerome Powell: Fed is Studying Risks of Stablecoins As A ‘Very High Priority’

Jerome Powell: Fed is Studying Risks of Stablecoins As A ‘Very High Priority’

Meanwhile, the central bank isn’t feeling the “urge or need to be first” on CDBC’s as they already got the first-mover advantage with the U.S. dollar being the reserve currency.

The US Federal Reserve Chairman, Jerome Powell, said on Thursday that the central bank needs to find “better regulatory answers” for global stablecoins, and it is their “high-level focus.”

“That’s been a high-level focus, and that will continue to be a high-level focus because they could become systemically important overnight,” Powell said while speaking at an online event hosted by Yahoo Finance and conducted by the Princeton economist Markus Brunnermeier in New Jersey.

“We don’t begin to have our arms around the potential risks and how to manage those risks. The public will expect that we do and have every right to expect that. So that’s something that we’ve been working on with our colleagues around the world… It’s a very high priority.”

Just last month, the U.S. President Trump’s Working Group on Financial Markets said stablecoins must meet the same regulatory standards as banks and other financial institutions.

European Central Bank President Christine Lagarde shared similar views when in November, she warned in an op-ed that if stablecoins became widely adopted, they could “threaten financial stability and monetary sovereignty” around the world.

This week, she called Bitcoin a “highly speculative asset” that is facilitating “funny business.” As such, “there has to be regulation,” Lagarde added, “This has to be applied and agreed upon.”

No Need for CBDC Yet

The Fed, meanwhile, is in no hurry regarding a central bank digital currency (CBDC); it is actually estimated to take “years rather than months” before the central bank releases a CBDC, said Powell. “We don’t feel an urge or need to be first” on CDBCs, reiterated Powell while continuing,

“Effectively, we already have a first-mover advantage because (the U.S. dollar is) the reserve currency.”

Still, the Fed is “investing heavily” in understanding the technology and studying all the policy risks CBDCs pose.

According to him, it was when private-sector money, like Bitcoin and other cryptos, was created that the Fed looked into CBDC. But while people think of these cryptocurrencies as money, “at some point, they find out that it’s not money and that’s a really bad thing we need to avoid,” he said.

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Author: AnTy

Bitcoin Caught Fire But Still in Very Early Innings: Anthony Scaramucci of Skybridge Capital

Bitcoin Caught Fire But Still in Very Early Innings: Anthony Scaramucci of Skybridge Capital

The billion-dollar wealth manager launched a Bitcoin Fund with $25 million investment to “democratize BTC like we did the hedge fund industry a decade ago.”

Anthony Scaramucci, founder and co-managing partner of Skybridge Capital has announced the launch of a new fund tailored to Bitcoin.

However, it is not only because the flagship cryptocurrency is on fire lately that they are betting on Bitcoin but as Sacramucci shared they “would have loved to have deployed the fund three or four months ago,” Bitcoin just went off like crazy.

However, according to him, this is just the beginning. “I think it caught fire but we’re still in very very early innings,” said Sacramucci in an interview with CNBC’s Scott Wapner. As a matter of fact, they have been busy for the last two years doing research on Bitcoin and getting comfortable with the digital asset.

After doing all the research, the billion-dollar wealth manager believes it is a store of value, and “given the monetary supply and the global central banking coordination right now this will be a very strong asset class over the next decade.”

During this research, they have also been in contact with MicroStrategy’s Michael Saylor, to do a “ton of salt talks,” which made it clear to them that “we needed to create a client-friendly product – “something with a $50,000 minimum that the mass affluent could access.” Sacramucci said,

“Until frankly there’s an ETF or there’s a customer account somewhere where people can hold bitcoin this will be a way for us to democratize Bitcoin like we did the hedge fund industry a decade ago.”

Jumping in Before Institutional Adoption Goes into Full Throttle

Skybridge Capital’s new Bitcoin fund started trading this week with $25 million of the firm’s capital. It has a three-month holding period to target investors for the long term. The fund will go live on January 4th for outside investors. Scaramucci said,

“We’re super excited.”

“You either have to accept that Bitcoin is a store of value or not. There are still skeptics out there and that’s why I think we’re in the first inning,”

And that’s why they don’t believe they are late or marking the top of the market now that BTC has rallied 118% in 4Q20 to make a new all-time high of $24,300 last week.

Bitcoin is “something that has crashed upwards in the last two and a half to three weeks” and according to him, “could go up two or three x from here.” Scaramucci believes they could be at the “precursor of an avalanche of institutional investors,” who are heading in the crypto market.

According to him, there are institutional investors not wanting to put BTC on their balance sheets in 2020 but the orders building up indicate a large swath of institutions is getting ready to do it in 2021. Given that a penny in BTC and 99 cents in cash would have beaten every other asset class, especially S&P 500 over the last decade,

“I don’t think it’s late, If anything it’s the first inning you’re about to see… that wave of early adoption by the institutional community I’d like to get our investors involved before that goes into full throttle.”

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Author: AnTy

Bitcoin Average Transaction Fees Jump 188% to Above $10 Following Price Rally

Bitcoin’s price is experiencing a bullish month with over 25% gains and came very close to hitting 2019 high yesterday.

Currently, BTC is trading around $13,220, having dropped over 4% since rallying yesterday, on the back of the increased trading volume, which has climbed above $3 billion.

This latest bout of volatility is not only proving good for investors, traders, and speculators but also miners as the percentage of Bitcoin miner revenue from fees increased to 22.25% yesterday — the highest value since January 2018.

This is because the average Bitcoin transaction fee has spiked 188% to above $10, as per Bitinfocharts.

The total fees have also jumped to 2.67 million from $403k on Oct. 17.

Coin Metrics BTC Fees
Source: Coin Metrics

Just last week, the average fees were mere $1.4, and from there, as the price of bitcoin rallied and the market jumped in to participate in this euphoria, the activity increased, and so did the fees.

The last time we were at this level was in February 2018, while the all-time high was $55 at the top of the bull market in mid-December 2017.

A similar surge is not seen in transaction count, but a spike was recorded in transaction transfer value.

However, with the latest surge, Bitcoin’s average transaction fee is eclipsing ETH’s at $1.69. Ethereum’s average transaction fees were higher than BTC’s for most of September after it exploded over the summer due to the rapid rise of DeFi.

But the momentum has shifted back to BTC.

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Author: AnTy

Trader Calls for an Extended DeFi Winter for the Best Performing Assets of 2020

The decentralized finance (DeFi) rage made many people in the crypto community very rich. With DeFi tokens surging by as much as 10,000% and more, they have become the best-performing assets of 2020, so far.

2020 saw everything from stocks, bonds, and commodities flying, hitting new all-time highs (ATH). But nothing compares to the success of DeFi.

In the macro, the YTD returns have been: gold 25% and S&P 500 2.62%.

In the crypto market, Bitcoin recorded 45.7% returns YTD. The center of the DeFi world, Ether, which according to Bloomberg strategist Mike McGlone, “appears to be maintaining its platform leadership status” meanwhile rallied 160%.

Now, in the DeFi market, the top year-to-date performers include Cream (+98,900%), Aave (+2,617%), YFI (+2,144%), Loopring (+953%), and Melon Protocol (+877%).

Crypto assets performed well during the Covid-19 crisis thanks to Bitcoin becoming a “refuge” like gold and offering a store of value amidst the concerns of fiat devaluation, weakening dollar, and inflation propelled by huge stimulus injections to counter the pandemic.

“A purely ethereal instrument performs well when the real economy is on pause,” said Marc Fleury, CEO of crypto asset management and fintech firm Two Prime.

As for DeFi solutions, they basically port financial functions like lending, borrowing, trading, earnings, and insuring on blockchains.

DeFi also led to a surge in interest in Ethereum contracts, with 5.2 million ETH now locked in the sector, as per DeFi Pulse.

“Retail cryptocurrency users have increasingly turned to derivatives to maximize their returns,” said Aziz Zainuddin, chief product officer of Fasset.

Time for a Break?

However, recently the growth of DeFi is slowing down. On Sept. 18, the DeFi collateral levels reached over $13.2 billion from less than $700 million at the start of the year.

This week, the losses recorded by DeFi tokens have the TVL of DeFi declining to $6.3 billion, currently around $8 billion.

While the deposits are struggling to get back up, the price of the tokens has been taking a hard beating for the past few days.

In the past seven days, DeFi projects have lost a considerable amount of their value, including Swerve (65%), Rune (59%), Balancer (32%), UMA (30%), YFI (30%), Bancor (25%), and Curve (20%) to name a few.

“Been expecting a DeFi mini-winter since two weeks ago, but the kind of obnoxious shit that happened last few days makes think we are headed for a much longer winter. Could easily be invalidated by price action but need to be mentally prepared whether you’re an investor or founder,” said entrepreneur and quant trader, Qiao Wang.

While the past week, the largest DEX by volume Uniswap launched its much anticipated token UNI, this week, a group of large accounts were caught dumping their coin.

This week, we also saw Curve fork Swerve’s TVL crashing from over a billion-dollar last week to a mere $44 million today.

But while the Defi bull market might take a pause, the builders aren’t stopping

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Author: AnTy

Altcoins Crash as Bitcoin Plummets Under $10,600; Overall Crypto Market Looks Pretty Bad

Bitcoin has been stuck around $11,000 since the middle of last week, very slowly moving upwards. Until today that is. The digital asset went down 3.7% to as low as $10,538 in a sudden move.

Trading around $10,600, BTC is in the red on the back of $1.2 billion ‘real’ volume. Top altcoins are also moving in tandem with the leading digital currency and recording losses between 5% to 16%.

Ether also dropped by more than 6% to nearly $355. According to trader Benjamin Blunts, the digital asset could further plunge to $320 level. “Eth is still very close to rolling over imo, the whole market looks pretty fucked tbh,” he said.

While CREAM (-35%), RUNE (-30%), and bzrx (-27%) are among the top losers, SASHIMI (+42%), Hakka (18%), and Orchid (+17%), are the biggest gainers.

Volatile Coming

Altcoins continue to react violently whenever bitcoin makes a downward move. And bitcoin itself remains vulnerable to equity market movements. When it comes to S&P 500, it can be a source of great price volatility with not only the most contested election in US history coming, but the passing of the Supreme Court Justice Ruth Bader Ginsburg over the weekend has only thickened the plot.

Besides the macro-environment this week, we will see more than 80k BTC option contracts expire, which could further open the doors to more volatility.

Over the weekend, Bitcoin dropped just under $10,800 only to move back up at the beginning of another week, much like other times, only to get dumped.

“We’re trading in the middle of nowhere ($11.5k resistance, $10.6k support),” said analyst DonAlt.

Meanwhile, Fundamentals Shoot Up

Analyst DonAlt also noted how the publicly traded MicroStrategy bought $425 million worth of BTC with no effect on the price of the digital asset.

“I’d honestly expect price to do anything but randomly drop/chop sideways after an event like that,” he said.

Before the weekend, MicroStrategy CEO Michael Saylor noted that the BTC purchase by the company was made in several off-chain transactions, which were then secured in a cold-storage with multiple off-chain transactions.

Source: @Woonomic

“If Bitcoin is treated as a treasury reserve asset, based on our model, 99.98% of all transactions will be off-chain, and assets-at-risk will be in cold storage 99.92% of the time,” said Saylor.

Over the weekend, Saylor further exhibited his BTC maximalism, stating, “When considering network dominance in the crypto industry, I find it clarifying to separate crypto-asset networks like Bitcoin from crypto-application networks like Ethereum & stablecoins.”

For now, the price of bitcoin might be taking its time to shoot off, but the fundamentals, the hash rate of the network, and difficulty continue to surge higher.

Miners are already contributing a record amount of hashes to generate the digital asset. With an 11.3% mining difficulty on the weekend, the third-largest positive adjustment in the past two years also made a new peak.

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Author: AnTy

Tezos (XTZ) Launches Delegated, Pre-Funded, Self-Sustaining Harbinger Price Oracles

Tezos has announced Harbinger — it’s very own oracle to deliver signed price feeds based on market data from multiple crypto exchanges to its network.

With Harbinger, Tezos is expecting the algorithmic stablecoins, lending platforms, and insurance products to kick off the new use cases.

Initial versions of the contracts are already deployed on mainnet and CarthageNet.

It’s not surprising that the network is delving deep into oracle as oracle projects have been having a lot of attention and gains in the crypto market. The crazy growth of Chainlink (LINK) is evidence of how much traction the decentralized off-chain data feed providers are getting.

Other popular oracles in the market are Band Protocol (BAND) and Augur (REP).

Take on the DeFi World

Now, Tezos, a liquid-proof of stake crypto network, is ready to make the most of the decentralized finance (DeFi) world through its oracle.

Oracles are critical to the fast-growing DeFi space, which has a total value locked (TVL) surpassing $7 billion, in order to have trusted price feed.

In its official announcement, Tezos announced that in Harbinger, “an account that pays for fees to update the price oracle can be delegated and pre-funded with tez,” much like staking.

This, it says, will enable the development of “self-sustaining” price oracles where the block rewards for participating in PoS consensus offset the fees required to keep the oracle data current.

“Having a reliable feed for on-chain price data is critical for DeFi lending platforms. Harbinger is an important building block for the decentralized finance ecosystem on Tezos,” said Robert Leshner, founder of Compound.

After taking inspiration from MakerDAO in StakerDAO, this latest one is based upon Compound’s Open Price Feed.

Harbinger is a set of tools and reference contracts, allowing anyone to become a ‘poster’ who retrieves prices from ‘signers,’ which are crypto exchanges to deploy a price oracle on the Tezos network, which then publishes cryptographically signed prices.

Moreover, Tezos smart contracts use callbacks to receive data to avoid reentrancy attacks.

In the meantime, the 13th largest crypto by market cap of $2.5 billion, XTZ is falling alongside the broad crypto market, trading at $3.43.

Also Read: Is the DeFi Craze Killing Tezos? XTZ’s Main Selling Point “Staking” Is Losing Appeal

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Author: AnTy

‘Ops’ Curve Finance ‘Overreacted’ & Seized Nearly 80% Voting Power for First Proposal

Curve Finance, the decentralized exchange liquidity pool on Ethereum, is currently voting for its very first proposal. As per this proposal, the project is looking to introduce a new Compound COMP-enabled pool to Curve Finance with DAI and USDC. It also proposes to boost incentives for liquidity providers of COMP.

Additionally, the proposal further involves a suggestion to introduce a withdrawal fee of 0.02%, which would be used to burn CRV, governance token of Curve, for this pool.

To vote, users have to obtain a separate voting token veCRV. Those who want to vote through the Curve DAO have to lock their tokens and vote with veCRV. Having large amounts of veCRV means, one can submit their own proposals as well.

Interestingly, the voting power is affected by the length of the period, a maximum of four years, the token is locked. As such, the longer the CRV tokens are locked, the higher the voting power.

Launched less than ten days ago, only a small portion of CRV tokens has been locked up, just 6.7% of the 10 million CRV tokens, which has been because of the gas prices, making it difficult for smaller liquidity providers to claim and lock their CRV.

According to the Curve Finance team, the goal of its CRV token is to “incentivise liquidity providers,” and get the users involved in its governance.

CRV meanwhile is struggling as it currently trades 94.4% lower than its all-time high, hit the day of the launch. Unlike the token price, Curve Finance enjoyed a growth of 338% during the same period to surpass $1 billion in total value locked in its protocol. The project has also crossed $2.5 billion in cumulative volume.

Concentration of Power

The voting process for the proposal saw the founder of Curve Finance take over 79.8% of the voting power, noted yEarn Finance founder Andre Cronje. He added,

“Since founder rewards are significantly higher than LPs and other voters, pretty much locked everyone else out. So guess voting is pointless now.”

Cronje further shared that he doesn’t mind any of this and thinks it’s “good the founder has arguably the most control, and there is nothing wrong with that.”

Curve reacted to this with, “Ops. Too bad,” adding,

“That was a reaction to 0x431 taking 50%, but the founder overreacted. The founder will abstain from voting now until more people votelock.”

The community has until August 28th before the governance system is up. To decrease the founder’s power to 50%, they only need to lock up to 150 million CRV.

Currently, in limbo, the project is waiting for a quorum to pass it, which is expected to be fixed in the coming days as voting power balances.

The decentralized nature of DeFi governance systems has been coming into question lately. The concentration of tokens in these systems is actually not better than the ownership structure in JP Morgan Chase or Bank of America, said TokenDaily in its report.

For instance, over 13% of voting power for Compound is controlled by the top 10 addresses.

This is because DeFi governance tokens offer a “unique opportunity to influence the direction of open protocols that are otherwise nearly impossible to control,” a power not unlike what is allotted to shareholders.

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Author: AnTy

Hunt for Yield Drives a Record Q2 for Genesis Lending

Genesis released its Q2 2020 report where it revealed a “very strong growth” in direct lending and liquidity mining or “yield farming” and believes this growth will continue into Q3.

The crypto lending service provider added more than $2.2 billion in new originations last quarter marking it the “largest quarter ever,” with a 324% increase from the same quarter last year. Active loans outstanding also surged past $1 billion, representing a 118% increase QoQ.

After decreasing in the previous three quarters, its BTC loan composition increased in this quarter, which came mostly from due to a decrease in USD loan composition over the same period. Combined, BTC and cash dominates the loan portfolio at 83.2%.

“The infrastructure, maturity, and general interest in BTC/USD markets relative to altcoin/USD markets is much greater, and we don’t see that trend redirecting any time soon.”

Since its launch, Genesis has originated over $8.4 billion in cryptocurrency loans.

In Q2 2020, Genesis traded $5.25 billion in spot trading, up from $4 billion in Q1, the majority of which traded on an OTC basis. In its first full month of derivatives trading, it recorded $400 million in notional value, with 80% concentrated in BTC/USD.

Insatiable Appetite

The Genesis report notes the major theme in Q2 was the demand for yield on digital assets, which continues to drive markets with the last quarter being ‘yield-centric.’ The most prevalent forms of yield generation are spot lending, call overwriting, and, most recently, liquidity mining with “an insatiable appetite for all of them.”

This hunt for yield in Q2 led to tremendous growth, especially in June, in the total interest paid to that pool of lenders and the number of unique institutional lenders on its platform, up 24% from previous months and 187% from last year and. The report reads,

“It’s not surprising DeFi yield farming has impacted our lending business, particularly on the demand side. The demand to borrow assets which have the most advantageous fee structures increases when the market is hot and rapidly decreases once the market is onto the next asset.”

Moreover, a jump was seen in call option overwriting,

“as an alternative to spot lending, many of our counterparties are selling out-of-the-money call options to generate yield via premiums.”

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Author: AnTy