Recently, Michael Moro, CEO of Genesis Global Trading, a digital currency platform which provides over-the-counter digital currency trading for high net-worth institutions, said that two-thirds of their loan portfolio was not used for anything related to shorting.
In an interview with CNBC Fast Money, Moro said that out of the loans that are active today, or as of September 30, which is worth $130 million, only one-third of the loans were used for hedging or shorting. However, 60% of the loan portfolio was still Bitcoin.
The interview covered various interesting topics of discussion about the platform, which lends cryptocurrencies like Bitcoin [BTC] and Ethereum [ETH] to various institutions, and whether these institutions were using these cryptocurrencies for shorting.
Bitcoin, like other assets, has a futures market and investors usually sell their futures contract with a bearish mindset and a prediction that Bitcoin prices will decline in the future.
He added that however, over 90% of that was not used for shorting and instead, was used for working capital or for arbitrage purposes. In addition, a decrease in the prices of Ethereum could be witnessed recently and Ethereum only accounted for 4% of the loan book. Moro stated:
“So you could argue that shorting is not the reason for Bitcoin or Ethereum’s sort of price decline that we’ve seen and it just natural holders that are actually selling as opposed to naked shorting guys who are trying to play the downside.”
Another important topic of discussion was about Bitcoin’s price prediction and whether the market has witnessed the lowest prices of Bitcoin for the current year. Moro referred to the last time he was asked the same question and according to him, the prices of Bitcoin had more chances of rising to $10,000 than going down to $5,000. He added:
“So far I’m not wrong, you know I am still sticking by that prediction because of what we’re kind of seeing in the ebbs and flows on the loan side, they have that confidence that I don’t think we’ll see $5,000 flat”
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