Digital currency prime broker Genesis Global Trading posted over $20.7 billion in notional value traded for derivatives during the fourth quarter of 2021, up 62% from the previous record of $12.8 billion in Q3. For all of 2021, derivatives notional value traded of $53.8 billion was up 812% from the previous year.
Spot trading volume of $30.8 billion in Q4 was up 23% from the previous quarter, with full-year volume of $116.5 billion, up 463%.
As the Genesis numbers make clear, derivatives trading has been the key driver for boosted volumes at global exchanges, pushing U.S.-based Coinbase, for example, to recently acquire FairX to improve its standing versus competitors. Over the last 24 hours, derivatives trading volumes at Binance were $78 billion versus spot volumes of just $20 billion, according to CoinMarketCap.
Turning to loan originations, Genesis said they hit $50 billion in Q4, up 40% from Q3. Loan originations for all of 2021 were up nearly seven-fold from 2020.
Bitcoin (BTC), however, lost some of its lending mix dominance, with Genesis citing the discount to NAV for the Grayscale Bitcoin Trust (GBTC) as the reason (Grayscale Investments, which manages the trust, is a unit of Digital Currency Group, which also owns CoinDesk).
BTC accounted for just 27.5% of the lending mix at year-end vs. 53.9% twelve months earlier. Gaining share were USD-and-equivalent loans, rising to nearly 40% by the end of 2021 versus 23.2% in 2020.
The firm also said it is seeking to grow its NFT-backed lending portfolio as the sector grows. For now, the company said most of its NFT lending volumes are driven by high net worth individuals.