The leverage throughout the cryptographic economy is evolving, not evaporating.
Total crypto-collateralized loans fell 4.9% quarter to trimester at $ 39.07 billion, the first decrease since the late 2023, as shown in the Q1 2025 Galaxy Research report. But while the titular figure contracted, the underlying dynamics suggests that leverage is a changing way, it does not fade.
Loans in decentralized finance loans (Defi) received a blow at the beginning of the quarter, sliding to 21%, before recovering sharply in April and May. The change was largely driven by the integration of Aaves Pendle, whose performance structure and high loan / value relations (up to 90%) caused a wave of fresh loans. At the end of May, Defi Paporus had increased more than 30% discount on the minimums, with Ethereum leading recovery.
Centralized finance loans (CEFI) rose 9.24% to $ 13,51 billion, led by Tether, LEDn and two prime. Even so, Galaxy points out that a narrow set of public disseminations limits the visibility of the true scope of centralized loans. Private desks, OTC platforms and offshore credit suppliers probably push the real total much higher. Maybe for 50% or more.
Meanwhile, Bitcoin
Treasury companies are silently becoming a new systemic leverage node. Companies such as the strategy (MSTR) have issued billions in convertible debt to finance BTC purchases. As of May, the total pending debt between the Treasury companies stood at $ 12.7 billion, much of the same Maduro between 2027 and 2028.
In derivatives, the growing open interest of CME, especially in Ether,
Signals of futures that accelerate institutional participation. At the same time, Upstart Exchange Hyperliquid has forged a growing part of the perpetual futures market, which underlines the continuous strength of leverage driven by retail trade.
The report points to an increasingly interconnected market structure, one in which stress in one place or instrument could quickly reverberate through the ecosystem. The leverage, in the current Crypto cycle, can be more fragmented than before, but is no less powerful.
