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BITCOIN INVESTMENT

‘WARREN BUFFETT’ ISN’T SHORTING

BITCOIN: NEW CRYPTO LOAN REPORT
CONCLUDES
EMILIO JANUS | MAY 20, 2019 | 13:00

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The Rundown 
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$425 Million New Loan Originations In First Quarter
Borrowing Trends And Covering Shorts
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Naysayers Like Warren Buffett Not Shorting Bitcoin

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A new report
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from bitcoin
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and crypto load provider Genesis Capital reveals
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some interesting insights into institutional short-selling of cryptocurrencies.

Notably, BTC is used less for speculation than altcoins while naysayers Jamie
Dimon, Warren Buffett, and Nouriel Roubini are not shorting bitcoin. 

$425 MILLION NEW LOAN ORIGINATIONS IN FIRST

QUARTER
Crypto-Loans provider, Genesis Capital has published its latest quarterly report
and insights, covering Q1 2019 and beyond.

The first quarter of 2019 continued the upwards trend seen at the end of 2018,
with an additional $425 million in new originations. This took the total since
launching the lending business in March 2018 to over $1.5 billion, 38% quarterly
growth. Active loans rose 17%, from $153 million to $181 million.

BTC still dominates Genesis’ loan-book, increasing slightly to make up 68% of the
loan portfolio. Bitcoin is showing consistent borrowing demand from “market-
makers and high frequency trading firms that need working capital for arbitrage
opportunities.”

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USD loans, using cryptocurrency accordance with our cookie
as collateral, havepolicy.
grown to 10% of the active loan
portfolio, following their introduction in Q4 2018.
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BORROWING TRENDS AND

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 Genesis published
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price, for both ETH and LTC.

For Ethereum, loan prominence correlates inversely to ETH price 00. This indicates
an increased interest in taking a loan of ETH to short against when the price is
already low.

As can be seen, the loan high in February drops just after the price starts to rally.
So many shorts were likely covered after the price had moved against their
position. Conversely, before the April rally, the majority of shorts were covered well
before price started to turn.

Litecoin, however, rallied throughout the quarter, giving an insight into the shorting
psychology. LTC loans increase in prominence after each price spike, as shorters
expect the asset to return to pre-spike levels. It is notable that the majority of these
shorts are covered before the price spikes again, suggesting better information on 
orWeunderstanding
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of the asset.
accordance with our cookie policy.

NAYSAYERS LIKEI WARREN

ACCEPT BUFFETT
I DECLINE NOT
SHORTING BITCOIN
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 BTC loans did not show
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instead growing steadily throughout the quarter. Genesis are currently lending
over 30,000 BTC.

Some suggestion that the business model encourages naysayers and bearish
market participants by enabling large block OTC short-selling. However, Genesis
say that they have not seen this type of counter-party.

Those participants who are shorting are often long something else,
only short for a small window, and/or managing hedge funds that are
long-term bullish on the space. In other words, Dimon, Buffett, and
Roubini are not shorting. It is easy to say something is worthless but it
is difficult to put capital behind that position and justify the risk of
being net short in this market.

As Bitcoinist reported last year, Bill Gates claimed that he would short Bitcoin if
there was an easy way to do it. Until that is, one of the Winklevii pointed out that
there is, via Bitcoin futures contracts.

What do you think of these lending market trends? Share your thoughts below!

Images via Shutterstock, Genesis Capital

Tags: bitcoin, Genesis Capital, Jamie Dimon, warren buffett

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