Genesis Global Trading makes a desperate move after the market meltdown

Almost a month after the cryptocurrency prices crashed, the effects are still troubling crypto businesses. One example is Genesis Global Trading, which had to suspend credit extensions. The company, which acts as an institutional OTC crypto trading and leveraging firm, observed the highest de-leveraging in its history.

Genesis CEO reveals the situation from the firm’s point of view

Genesis CEO, Michael Moro, spoke about the last month's market meltdown in a recent episode of The Scoop. He said that the event left crypto futures at a major discount. The credit market currently sees an unprecedented level of instability. The reason for this is the disappearance of arbitrage opportunities due to high volatility seen on March 12th and 13th.

This massive change came rather suddenly, and in big contrast to what the beginning of the year promised. Back then, the Bitcoin futures market saw a significantly better performance. At the time, Genesis counterparties would borrow large amounts in USD, and purchase crypto assets. Then, they would sell them in the futures market, and take advantage of the arbitrage opportunities.

All of that changed after the market crash. Moro said as much himself, stating that "March 12th and 13th happened and that market flipped."

Instead of continuing the process of borrowing and investing in futures, traders returned the loans. The futures market saw trades at a major discount and traders entered short positions at the spot market.

Desperate time brought a desperate move

Bitcoin's own blockchain started seeing major congestion due to the change in trading activities. Moving assets became quite challenging during those initial days of the crash.

"The level at which the dollars were coming in and the bitcoins were going out the door was the largest that we've ever seen," said Moro, describing the major de-leveraging.

As a result, Genesis had to make a desperate move, and halt credit extensions for the rest of the month. At this moment, it still only conducts business on a client-to-client basis. Moro continued by saying that all markets are melting. With a situation like that, the company could not afford to continue extending credits.

It decided to wait for as long as it took, regardless of whether that included a few weeks, a month, or longer. While its rivals did not do the same, Moro still insists that the crypto market is currently too risky. He insisted that Genesis is not comfortable with lowering collateral rates.