Genesis Capital, found online at GenesisCap.co, is a Genesis Trading affiliate that aims to offer institutional digital currency lending. Here’s our review.
What is Genesis Capital?
Genesis Capital is an institutional digital currency lending platform. The platform allows institutions to borrow bitcoin, Ether, Litecoin, and other digital currencies in large sizes over fixed terms.
The platform is an affiliate of Genesis Trading and Digital Currency Group.
There are a number of different companies listed under the name Genesis Capital. The best-known company under that name can be found online at Genesis-Capital.com. That company also has its own Wikipedia page here:https://en.wikipedia.org/wiki/Genesis_Capital. That company is an independent investment banking firm founded in 2003.
Genesis Capital – the digital currency lending platform we’re talking about in this review – has no apparent connection to any other company under that name.
Genesis Capital was announced in February 2018, when Genesis Trading decided that the division would spin off of its existing cryptocurrency exchange. The platform is being seen as yet another way for hedge funds to take a position on bitcoin and other cryptocurrencies.
How Does Genesis Capital Work?
Genesis Capital offers a variety of institutional borrowing solutions to meet different business needs. Some of the use cases and business needs that can be met on the platform include all of the following:
Institutional Market Making
- Gain additional liquidity to support on-exchange or OTC market-making
- Deploy towards existing algorithmic or high-frequency strategies
Hedging or Speculation
- Businesses can short the spot market to hedge portfolio risk or derivative positions
Firm Working Capital
- Businesses can access alternative liquidity for remittance or other miscellaneous working capital needs
Overall, Genesis Capital offers loan terms that are specifically designed to meet the needs of institutional funds, market makers, and other entities.
Minimum loan size starts at $100,000. Durations range from 2 weeks to 6 months. Loans come with optional call protection, and USD is accepted as collateral to back the loan. Digital currencies are delivered straight to your digital currency wallet.
Genesis Capital emphasizes the appeal of working with a regulated and trusted counterparty. The company complies with federal MSB/FinCen regulation.
Another core function of Genesis Capital’s lending platform is the ability to seamlessly execute large block short-sales by relying on Genesis Trading, the Genesis Capital affiliate. Users can access Genesis Trading’s OTC platform after onboarding, for example, and institute short sales across multiple currencies. There’s a minimum short sale size of $100,000.
Overall, Genesis Capital might be most useful to companies that believe bitcoin is going to drop in price. Here’s how one press release explained it (source: http://strategiccoin.com/genesis-trading-launches-digital-currency-lending-service-institutional-investors/):
“Access to digital currency lenders will provide institutions with a more robust two-sided market, as they will better be able to hedge returns, limit risk, and leverage arbitrage opportunities. This service provides bearish investors with clear benefits, as it will allow them to sell borrowed coins immediately in the belief that they will be able to buy them back later at a more affordable price.”
In other words, hedge funds that believe bitcoin, Ether, and other cryptocurrencies are going to drop can borrow cryptocurrencies from Genesis Capital today, then sell them immediately to purchase more coins in the future.
Of course, investors with long positions can also use Genesis Capital to minimize risk. An institution can short-sell borrowed bitcoin to hedge their long positions in the futures markets or other derivatives markets.
Who’s Behind Genesis Capital?
Genesis Capital is affiliated with Digital Currency Group and Genesis Trading. Digital Currency Group is a trusted authority on digital currency investing, while Genesis Trading is a full-service institutional trading firm focused on digital currencies.
Genesis Capital complies with federal MSB/FinCen regulations.
The company was founded in 2018 in New Jersey, when Trading Capital decided that Trading Capital would be a full-fledged spin-off of their firm.
Genesis Capital Conclusion
A robust two-sided market will attract more institutions to bitcoin trading and cryptocurrency trading. Genesis Capital plans to make it easier for institutions to engage in both sides of the market. The institutional-grade lending platform allows users to borrow and trade through a single interface, relying on Genesis Capital to borrow money and then using Genesis Trading to engage in OTC trading.
To learn more about Genesis Capital and how it works, visit online today at GenesisCap.co.