Genesis Confirms One Crypto Sector Is Getting the Attention of Institutional Capital

Digital Lending and Trading Firm Genesis says that institutional investors are moving into one crypto sector.

Furthermore, The digital lending and trading firm in a new report notes that the firm is seeing greater demand for leading smart contract platform Ethereum (ETH). Especially, during the Q3 as its institutional clients engages with DeFi projects.

So, Genesis explains
“With rising adoption on DeFi platforms, Genesis saw greater borrowing appetite in ETH…”
“(and sometimes BTC) from institutions to post as collateral or liquidity pairs across DeFi applications.”

As per Genesis, Ethereum amasses 32% of its loan book in Q3, which equates a 106% spike from 15.5% at the end of 2020.

More so, The digital lending and trading firm notes that with Ethereum, the demand for the US dollar also surges last quarter.

“BTC, ETH and USD are currently each almost one-third of our loan portfolio…”

Then, Genesis continues.
“This may point towards a persisting trend where BTC basis opportunities are less…”
“attractive, where ETH and USD demand (especially in DeFi) outpace and could…”
“potentially become the primary allocation of our loan portfolio.”

Notably, Genesis confirms the market interest in layer-1 projects spikes also during the third quarter.

“While layer-1s compete on transaction speed and security, incentive programs have…”
“catalyzed a storm of cross-chain activity, leading to a reduction in ETH’s (Ethereum)…”
“market share in favor of layer-1s including Solana (SOL), Terra (LUNA), Avalanche (AVAX) and Fantom (FTM).”
Then, Genesis concludes.

The, for bitcoin, The digital lending and trading firm notes its weighting in the firm’s overall portfolio declines in Q3, describes as
“continued [Grayscale Bitcoin Trust] premium inversion and flattening of the basis curves.”