The value of Ethereum (ETH) has been under severe pressure over the past couple of months. The digital currency has been struggling to surge higher and it even tested a new yearly low recently. The recent price trend of the digital currency has been attributed to a lot of factors. Some analysts have attributed to the massive selloffs of new startups. Some have said it’s due to the numerous Initial Coin Offerings in the market. Others have also blamed it on the short selling of the digital currency.
Recently, the CEO of Genesis Global Trading – Michael Moro – came out to defend the latter. He said the platform giving out loans in Ethereum (ETH) and short selling the digital currency was not the reason why Ethereum plunged deeply.
Ethereum (ETH) Loans Drops from 25% to 4% on the Loan Book of Genesis Global Trading
In a recent interview with CNBC Fast Money, the CEO of Genesis Global Trading talked about the decreasing interest to short Ethereum (ETH). He said Ethereum (ETH) accounted for almost 28 percent of the loan book of Genesis Global Trading. Moro said that value dropped to about 25 percent in August. At the last assessment, which was in September, Moro said the number has dropped to 4 percent.
Back in March, Ethereum (ETH) accounted for 42 percent of the firm’s loan book. Bitcoin (BTC) accounted for 50 percent, and the remaining 8 percent was accounted for by other digital currencies. The percentage accounted for Ethereum has heavily declined since then, and it is just 4 percent now.
Are Loans to Short Ethereum (ETH) Diminishing?
One question that has been lingering in the crypto space is whether loans given out by the firm to short Ethereum (ETH) had been diminishing. The CEO also talked about Bitcoin (BTC) and how it saw a similar trend like Ethereum. He said as the value of Bitcoin (BTC) approach the $6k to $5,900 mark, short traders could start purchasing the coin and quickly closing out their short positions.
The interview also covered discussions regarding the shorting of Bitcoin (BTC). They talked about the viability of shorting Bitcoin (BTC) in order to raise working capital. The discussion also covered the risk and liability involved in a business that runs its operations via Bitcoin (BTC).
The CEO used CME as an example. CME is a derivatives marketplace that offers options and futures products for risk management. He said that the when CME and the CBOE futures went live, market-makers required access to the cash markets to verge the price that they were taking on the side of the futures.
He said Genesis Global Trading would borrow Bitcoin (BTC) to some of the market makers. Hence, those that are not familiar with the digital currency space would be able to get access to the cash markets. He said this could help them to efficiently hedge their positions.
Ethereum (ETH) Price Today – ETH / USD
At the time of writing, Ethereum (ETH) is changing hands at $204 after a decrease of about one percent over the past twenty-four hours. The current market cap of the digital currency is $21.02 billion and its trading volume over the past twenty-four hours is $1.29 billion.