Ether has cannibalized bitcoin in Genesis’ loan book as more hedge funds borrow ETH to deploy into decentralized finance (DeFi) protocols, the cryptocurrency lender reported in its Q1 results on Wednesday.
ETH loans at Genesis, which is owned by CoinDesk parent company Digital Currency Group, increased by 400% from $465 million in Q4 2020 to $2.4 billion in Q1. ETH now makes up 27% of the lender’s loan book, whereas its portion was just 15.5% of the loan book in Q4.
Meanwhile ETH locked in DeFi overall has increased from $15 billion to $60 billion, a 300% increase.
“It shows just how much institutions are taking DeFi seriously,” said Momin Ahmad, chief strategy officer at crypto credit data company Credmark. “It’s kind of hard in DeFi to figure out who’s doing what.”
Genesis as DeFi gateway
The lender originated 163% more loans in the first quarter than it did in the previous quarter. Its total loans outstanding now amount to $9 billion, a 136% increase from the $3.8 billion in loans outstanding the firm held in Q4.
Genesis did note a decrease in BTC lent out in Q1 compared to other quarters because traders have now lost the arbitrage opportunity of selling bitcoin at a premium in the public market after a vesting period in the Grayscale Bitcoin Trust (GBTC), which is now trading