Genesis Trading’s Q3 Report Below Par Amid Sluggish Market

• Genesis saw a precipitous 44% drop in spot trading volume.
• There were a total of $4.9 billion in active loans in the 2022 third quarter.

Genesis Trading, a cryptocurrency brokerage, has released a new analysis detailing the effects of the current market drop on the cryptocurrency loan sector. Genesis originated $8.4 billion in loans in the third quarter of 2022, a decrease of almost 80% from the previous year’s corresponding period.

There were a total of $4.9 billion in active loans in the 2022 third quarter. The fourth quarter of this year saw a decline to $2.4 billion. The brokerage firm, however, claimed that its lending desk was open and operational during the market drop. However, as macro circumstances have worsened, the industry’s desire for leverage has diminished.

Struggle Continues Post 3AC Fiasco

The brokerage company has seen a downturn in other areas of business as well. As a result, Genesis saw a precipitous 44% drop in spot trading volume, to $9.6 billion. The notional value of derivatives traded by its desk fell 30% year over year to $18.7 billion. Client enrollment in the company’s custody services division, the sole bright spot, increased by 8%.

When the cryptocurrency hedge fund Three Arrows Capital went down in June, Genesis was one of the largest debtors left holding the bag. The business, like many others in the cryptocurrency industry, was forced to make difficult choices in order to streamline its operations.

The summer of 2022 saw a massive restructuring at Genesis, including the elimination of 20% of positions and the introduction of an entirely new management team. Several of its highest-ranking employees have left in recent months, including the company’s new chief risk officer, Michael Patchen.

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