Genesis, a digital asset industry pioneer and digital currency prime brokerage, today released its Q1 2022 Market Observations Report, highlighting major trends across institutional digital asset markets. The report provides a breakdown of Genesis' lending, derivatives, spot, and custody activities across Q1 2022, along with in-depth insight from the Genesis lending and derivatives desks on trends such as the growing adoption of permissioned DeFi protocols, the gradual institutionalization in debt markets and the continued growing interest from the traditional financial community in stablecoin derivatives.
The first quarter was characterized by Genesis' notable growth across most of its operations ? including another record quarter in derivatives trading activity ? even against the backdrop of lower overall crypto market volumes and high levels of uncertainty throughout most asset types. Highlights during the quarter include the following:
"Institutions continue to develop their crypto strategies and strengthen their understanding of this industry, even amid the market uncertainty that has marked the start to this year," said Michael Moro, CEO of Genesis. "As we continue to deepen engagement with our clients across Genesis' wide range of products, we are committed to further expanding our market share and delivering innovative strategies for clients to access this growing asset class."
Derivatives and Spot Trading
Genesis saw another record quarter in derivatives trading activity, with over $27.8 billion in notional value traded globally. This figure includes bilateral OTC, negotiated block futures trades and exchange-traded volumes, representing 33% quarter-on-quarter growth. In Q1, Genesis was also #1 in market share for blocked BTC and ETH Deribit-cleared derivatives via Paradigm with over $6.6 billion transacted1. The firm also printed the first ever ETH and BTC Micro options trades on the CME in March. Additionally, the Genesis derivatives desk traded 61 different assets in the first quarter, with $4.7 billion notional traded in altcoin derivatives ? Genesis' highest quarterly total yet as it continues to prove its ability to help clients hedge and take directional positions in even the most esoteric of markets.
The Genesis spot desk traded over $11.4 billion in volume in Q1, with the continuing trend toward greater diversification of assets. BTC comprised 48% of the traded volume, in line with last quarter, while ETH saw a drop from 33% to 23% of total traded volume in Q1. The Genesis spot desk also saw a notable increase in activity across assets such as LUNA, SOL, AVAX, ZEC, LINK, ATOM and GALA.
Despite a market environment faced with many uncertainties, as valuations across all crypto assets nearly halved from November peaks, the Genesis lending desk originated over $44.3 billion in loans in Q1 2022, bringing cumulative originations since inception in March 2018 to $195 billion. Active loans outstanding also climbed to $14.6 billion to close the quarter, up 17% from the end of 2021.
The strong level of activity Genesis saw in Q1 ? despite the weak market environment ? was mainly due to organic volume driven by new institutions entering the industry and by increasing demand for cash loans, which allowed Genesis to capitalize on its core competitive strengths as a leading digital asset prime broker.
Assets under custody increased by 23% quarter-on-quarter, while the USD volume of assets moved from Genesis Custody to the Genesis trading or lending desks increased by 141% over the same period. This comes as Genesis continues to integrate its lending and trading desks more tightly into its SOC 2 Type 1-audited and FCA-registered custodian.
The number of customers onboarded to Genesis Custody also increased by 36% over the quarter, driven mainly by large public and private mining companies, venture capital firms and other traditional asset managers on a global level, following Genesis' FCA registration and the roll out of its 24/5 support.
The Genesis Q1 2022 Market Observations Report provides a comprehensive look into key market activity through insights from the firm's spot trading, derivatives trading, lending, custody, treasury and prime brokerage businesses. To read the full Q1 2022 Market Observations Report, click here.
Genesis is a full-service digital currency prime brokerage providing a single point of access for select qualified individuals and global institutional investors. Genesis combines unrivaled operational excellence, a seamless user experience, and best-in-class client service to provide the full suite of services global investors require to manage their digital asset portfolios.
The firm offers sophisticated market participants a fully integrated platform to trade, borrow, lend, and custody digital assets, creating new opportunities for yield while increasing capital efficiency for counterparties.
Genesis is a wholly owned subsidiary of Digital Currency Group (DCG), one of the largest private investors in blockchain and digital asset companies.
For more information on Genesis, please visit genesistrading.com and follow @GenesisTrading on Twitter.
1 Per Paradigm statistics as of April 28, 2022
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