What is institutional crypto lending?

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Institutional crypto lending involves lending digital assets primarily to institutional clients such as trading firms, hedge funds, and market makers. This practice is facilitated by companies like Genesis, which act as intermediaries by lending assets like Bitcoin, Ethereum, or stablecoins to large financial entities for purposes such as trading or arbitrage 1.

These loans can be either over-collateralized or unsecured. Over-collateralized loans require the borrower to post collateral worth more than the loan amount, providing a safety buffer for the lender 2. Unsecured loans, though riskier, usually offer higher yields but are less popular due to the increased risk, especially in volatile markets 2.

Institutional lenders like Genesis focus on providing capital that these trading firms can use to execute large trades or arbitrage opportunities. This allows firms to leverage their positions without needing to liquidate their crypto assets, often avoiding triggering taxable events 1 3.

Crypto Institutional Lending

Matt from Genesis explains how institutional lending in crypto works, catering to trading firms and hedge funds. Genesis acts as the intermediary for these institutions, providing capital in various forms like crypto or stablecoin for trading and arbitrage purposes.
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