Genesis: Crypto Lending Tanks 80% In Third Quarter, Gloomy Outlook Ahead

Crypto brokerage firm Genesis trading has recently published a new report explaining how the crypto lending market is facing the heat of massive correction in the crypto space. For the third quarter of 2022, Genesis originated $8.4 billion in loans dropping more than 80% in this three-month period.

During the sector quarter in 2022, the total active loans were $4.9 billion. This dropped to $2.4 billion during the last quarter of this year. However, the brokerage stated that its lending desk remained active throughout the market sell-off. But the industry’s appetite for leverage has considerably reduced amid deteriorating macro conditions.

Additionally, the brokerage firm has also experienced a decline in other spheres of its business. The spot trading volume at Genesis tanked by a staggering 44% to $9.6 billion. Furthermore, its derivative desk traded $18.7 billion in notional value, dropping 30% over the previous quarter. The only bright spot has been the company’s custody services businesses wherein the client signups jumped by 8%.

Fourth Quarter Outlook By Genesis

Going into the fourth quarter, the outlook doesn’t look pretty bright for the crypto firm. In its report, Genesis wrote:

“Heading into the fourth quarter, the cryptocurrency market is lacking directional momentum as participants are taking stock after a beleaguering summer of endless negative headlines, the company is prepared for a sustained crypto winter.”

Genesis was one of the biggest creditors caught in the collapse of crypto hedge fund Three Arrows Capital earlier this year in June. Alike other crypto firms, the company had to take some harsh decisions to consolidate its operations.

During the summer of 2022, Genesis laid off 20% of its staff along with a complete rejig of its leadership team. Some of its most senior officers including newly appointed chief risk officer Michael Patchen departed over the last few months.

Although Wall Street is roaring over the last week, the industry slowdown is clearly visible among BigTech firms. This could also impact the crypto space going ahead.