Crypto Exchange Volume Down, But Loans Against Collateral Are Up

Investing, News | February 23, 2019 By:

Investors are still seeking to leverage their bitcoin and altcoin holdings, but they’re not buying and selling. Instead, they are increasingly turning toward borrowing against the holdings.

Genesis Capital, a crypto lender, has reported it doubled its loans in the last quarter of 2018, allowing investors to take shorting positions. The company’s report stated that ” in response to client demand to borrow USD against crypto collateral, we launched a cash lending pilot program. The reception has been quite strong and we have decided to officially launch the new fiat currency lending business.”

The trend is mirrored in a second report by research firm Diar, which noted that volume on exchanges is dropping at the start of the year, even on the largest exchanges.

Diar reports a sizable drop in crypto trade volumes in January 2019 at exchanges Binance, Gemini, OKEx and Coinbase.

Malta’s Binance, the largest exchange by volume, saw trading volume drop by 40 percent in January compared to December. Similarly, US exchange Coinbase saw January trading volume at the lowest level since May 2017.

Hong Kong-based OKEx has gone down 30 percent, from approximately $5.5 billion to below $4 billion.