Coin Bureau

Crypto Leverage Shocker: $61B Risks EXPOSED [Full Report]

The video dissects Galaxy Research’s “State of Crypto Leverage Q4 2025” report, which evaluates how leverage across centralized finance (CFI), decentralized finance (DeFi) and corporate debt performed after the October 10 liquidation shock. The report shows CFI borrowing rose to $27 billion, an 11 % quarterly gain and a 280 % increase since the Q4 2023 market bottom, while DeFi outstanding loans dropped 24 % to $33 billion, leaving total crypto‑collateralized borrowing at roughly $61 billion. Tether controls 61 % of the CFI market; Maple Finance and Galaxy split the next 6‑7 % each, together holding 75 % of CFI volume. Stable‑coin off‑chain rates fell to about 3.5 %—below on‑chain rates—for the first time in two years, prompting a shift toward cheaper off‑chain borrowing. The authors highlight that looping strategies lost profitability after the October liquidation, and that the drop in DeFi borrowing was amplified by falling collateral values and a risk‑averse market. They also note that futures open interest collapsed by nearly 40 % to $120 billion, with Binance alone accounting for 20 % of perpetual contracts, underscoring the lingering stress on leveraged positions. These dynamics suggest leverage is receding but not disappearing; on‑chain lending still represents 60 % of total crypto credit, and corporate digital‑asset treasuries face sizable debt maturities beginning 2028. Market participants should monitor off‑chain rate differentials and upcoming debt roll‑overs as potential catalysts for renewed borrowing activity.