- Buy Crypto
- Markets
Futures- Spot
- Copy Trade
- Earn
- More
Galaxy Digital: Crypto Market Leverage Surges, Heightening Market Vulnerability
BlockBeats News, August 18th. According to Coindesk, a Galaxy Research report shows that the Q2 crypto market lending scale has grown by 27%, reaching $531 billion, the highest level since early 2022, mainly driven by DeFi lending demand and a rebound in risk appetite. Bitcoin retreated from $124,000 to $118,000, triggering over $1 billion in cryptocurrency derivatives market liquidations, the largest scale of long liquidation since early August. Analysts believe this is more like a healthy profit-taking rather than the start of a reversal, but it also highlights the market's vulnerability when leverage quickly accumulates.
Galaxy analysts pointed out that pressure points have begun to emerge. In July, Aave saw a large withdrawal, driving up the ETH borrowing rate above the Ethereum staking yield, breaking the "carry trade" trading logic—using staked ETH as collateral to borrow more ETH. This deleveraging process triggered a cascade of liquidations of collateral positions, setting a 13-day record for the Ethereum 2.0 exit queue.
Galaxy stated that since July, the off-chain market borrowing cost of USDC has been continuously rising, while the on-chain borrowing rate has remained stable. The interest rate spread between the two has widened to the highest level since the end of 2024. This deviation implies that the off-chain demand for the dollar has exceeded on-chain liquidity, which could exacerbate volatility if the market environment further tightens. With the surge in lending scale, concentration of lending power, DeFi liquidity crunch, and the widening gap between the on-chain and off-chain dollar markets, the system is revealing more pressure points. Thursday's $1 billion liquidation serves as a reminder that the impact of leverage is two-sided.
You may also like
21Shares Enhances Crypto ETP Pricing with FTSE Partnership
Key Takeaways: 21Shares AG updates the pricing methodology for its Bitcoin and Ethereum-linked ETPs on the London Stock…
Alibaba AI Projects Crypto Value Surge for XRP, Bitcoin, and Ethereum by 2026
Key Takeaways: Alibaba’s AI predicts significant price increases for XRP, Bitcoin, and Ethereum by 2026’s end, driven by…
Ethereum USD Reclaims $2,200 Amidst Crypto Market Surge
Key Takeaways: Ethereum USD rebounds from $1,840 lows, reclaiming the $2,200 mark with a +19% recovery as of…
TRUMP Memecoin Investors Granted Exclusive Mar-a-Lago Invite
Key Takeaways: $TRUMP memecoin holders gain exclusive access to a Mar-a-Lago event featuring Donald Trump and other key…
Why Is Crypto Up: BTC USD Decoupling From Gold Amid Heated Israel-Iran Conflict
Key Takeaways: Bitcoin’s price recently hit $74,000, marking its highest close since February 2026 before slightly retracting to…
Trump Meme Coin Skyrockets 60% Post Mar-a-Lago Gala Promotion
Key Takeaways: TRUMP meme coin surged by 60% following the announcement of a gala event at Mar-a-Lago. Trading…
Large Bitcoin Wallets Resume Accumulation as BTC Holds $71K Level
Key Takeaways: Wallets holding 10 to 10,000 Bitcoin now control 68.17% of Bitcoin’s circulating supply, signaling renewed confidence…
Solana Hits Key $100 Resistance amid Institutional ETF Interest
Key Takeaways: Solana is witnessing a surge towards the psychological $100 mark, currently trading at $93 as of…
CLARITY Act Faces Diminishing Odds in 2026 Without April Committee Approval
Key Takeaways: Alex Thorn from Galaxy Digital highlights the narrowing timeframe for the CLARITY Act to progress in…
Billionaire Predicts Stablecoins’ Dominance in Global Payments Over Next 10-15 Years
Key Takeaways: Billionaire Stanley Druckenmiller foresees stablecoins as a central player in global payments within 10-15 years. Blockchain…
Hyperliquid Price Surge: A Potential 23.29% Drop Expected
Key Takeaways: Hyperliquid is anticipating a price drop to $28.81, reflecting a potential 23.29% decrease in the next…
AAVE Crypto Swap Leads to $50 Million Loss: A Costly Lesson in DeFi
Key Takeaways: A single crypto whale lost $50 million attempting to swap USDT for AAVE due to severe…
Aptos Price Trends and Predictions for March 2026
Key Takeaways: Aptos is priced at $1.01, trading 34.62% above the predicted price for March 21, 2026. Market…
DOJ and Europol Take Down SocksEscort: A Major Blow to Crypto Crime
Key Takeaways: U.S. DOJ and Europol successfully dismantled the SocksEscort proxy network, an essential tool for crypto-related cybercrime.…
Mantle Market Analysis: Current Trends and Predictions for March 2026
Key Takeaways: Mantle’s current price is 35.18% above the predicted value for March 21, 2026. The Fear &…
Bittensor Trading Above Price Prediction: Market Analysis and Forecast for March 2026
Key Takeaways: Bittensor (TAO) is trading at $279.82, significantly above the predicted $211.41 for March 20, 2026. The…
Pepe Coin Price Surges 20%: Will March Push It Higher?
Key Takeaways: Pepe coin saw a massive 20% surge, reaching near $0.00000406, reflecting renewed market interest in memecoins.…
Sui Crypto Price Prediction – SUI Estimated to Decline to $ 0.783986 by March 21, 2026
Key Takeaways: Sui Crypto, currently priced at $1.06, is predicted to fall to $0.783986 by March 21, 2026.…
21Shares Enhances Crypto ETP Pricing with FTSE Partnership
Key Takeaways: 21Shares AG updates the pricing methodology for its Bitcoin and Ethereum-linked ETPs on the London Stock…
Alibaba AI Projects Crypto Value Surge for XRP, Bitcoin, and Ethereum by 2026
Key Takeaways: Alibaba’s AI predicts significant price increases for XRP, Bitcoin, and Ethereum by 2026’s end, driven by…
Ethereum USD Reclaims $2,200 Amidst Crypto Market Surge
Key Takeaways: Ethereum USD rebounds from $1,840 lows, reclaiming the $2,200 mark with a +19% recovery as of…
TRUMP Memecoin Investors Granted Exclusive Mar-a-Lago Invite
Key Takeaways: $TRUMP memecoin holders gain exclusive access to a Mar-a-Lago event featuring Donald Trump and other key…
Why Is Crypto Up: BTC USD Decoupling From Gold Amid Heated Israel-Iran Conflict
Key Takeaways: Bitcoin’s price recently hit $74,000, marking its highest close since February 2026 before slightly retracting to…
Trump Meme Coin Skyrockets 60% Post Mar-a-Lago Gala Promotion
Key Takeaways: TRUMP meme coin surged by 60% following the announcement of a gala event at Mar-a-Lago. Trading…
App