PANews reported on June 5th that the Galaxy Research Q1 2025 report shows the total lending scale with cryptocurrency as collateral decreased by 4.9% quarter-on-quarter to $39.07 billion, marking the first decline since the end of 2023. However, leverage has not disappeared but transformed in form.
DeFi lending was initially setback this quarter, with a drop of up to 21%. Later, due to Aave's integration of Pendle tokens, its yield structure and high loan-to-value ratio triggered a new lending wave. In April and May, it rebounded strongly, recovering over 30% from its previous low point, with Ethereum leading the recovery. CeFi lending grew by 9.24% to $13.51 billion, with Tether being a major driving force, though the actual scale may be higher due to limited public disclosure. Additionally, listed companies holding Bitcoin are becoming new leverage nodes, such as MicroStrategy issuing debt to purchase Bitcoin, with unpaid debt reaching $12.7 billion in May. In the derivatives field, CME ETH futures open interest increased, and Hyperliquid expanded its market share in perpetual futures. The report noted that market structures are becoming increasingly interconnected, with single pressures potentially spreading quickly. While current crypto leverage is more dispersed, its power remains undiminished.
