Quick Take
- While the market for crypto lending may still be small relative to other credit markets, the rapid growth in value of the entire crypto asset class, creation of a new financial system (DeFi), and the ability to provide working capital for companies in the broader ecosystem all speak to the opportunity for crypto credit to maintain its growth in the coming years
- In the first quarter of 2021, crypto loan originations from Genesis surpassed its entire cumulative originations to date — a testament to the pace of growth in the market for crypto collateralized credit.
- Contrary to popular belief, crypto has a shortage of leverage in the system; demand and supply dynamics for crypto can vary widely depending on market environment and regime.
- Industry participants highlight cross-margin, 3rd party tech provider solutions, DeFi, and better connectivity solutions as ways to improve capital efficiency within crypto credit.