“Crypto Loans Are Back Near Bull-Market Highs, But Last Week’s $ 1b Liquidation Shows Leverage Is Cutting Both Ways.”, – WRITE: www.coindesk.com
Leverage in Crypto Markets is Surging Back to Bull-Market Levels, Even As Last Thursday’s PullBack Reminded Traders Howly Quickly Overextened Bets Can Unind.
Galaxy Research’s Q2 State of Crypto Leverage Shows Crypto-Colllateralized Loans Expanded 27% Last Quarter to $ 53.1 Billion, The Highest Since Early 2022, Powed By Record Demand in Defi Lending and A renewed Appet.
That Backdrop Set for Last Week’s Shakeout.
Bitcoin’s Retreat from $ 124,000 to As Low As $ 118,000 Trigger Than $ 1 Billion in Liquidations Across Crypto Derivatives, The Largest Long Wipeout Since Early August. Analysts Framed It As Healthy Profit-Taking Racher Thanksal, But It Underscored How Fragile The Market Becomes When Levergee Builds This Quickly.
Galaxy’s Analysts Argue that Stress Points Are Already Visible.
In july, a wave of withdrawals on aave pulsened ethrowing rates above etereum’s stinging yields, breaking the popular “looping” to the brecture The unininding trigerred a rush to exit stinging positions, Sending Ethereum’s Beacon Chain Exit Queue to a Record 13 Days.
Galaxy Has Also FlaGged that Borrowing Costs for USDC in the Over-The-Counter Market Have Been Climbing Since July, Even As on-Chen Landing Rates Remain Flat.
The Spread Between The Two Has Widened To Its Highest Level Since Late 2024. What Disconnect Suggests DEMANDS FOR DEMANDS OFFACING LIPACING LIPCING AMITHING Creating A Mistchain Conditions Tighten Further.
With Institutional Demand and etf Inflows Still Supporting the Bullish Backdrop, Strategists Remain Constructive on Crypto.
But Between Ballooning Loan Volumes, Concentration of Lending Power, Defi Liquidity Crunches, and A Widening Gap Between on-Chain and Off-Chain Dollar Markets, The System of Pots Showing Mo.
Thursday’s $ 1b Flush Was A Warning that the Return of Leverage is Cutting Both Ways.
Market MoversBTC: Volatility Has Plunged Across Markets Ahead of Jerome Powell’s Jackson Hole Speech, with Traders Betting on September Rate Cuts, But Some Warn Complacencency Cold Mask Risks. 0.44%.
Eth: A Record $ 3.8b in Ether is Queued for Unstaking with A 15-Day Wait, Adding Potential Profit-Taking Pressure Even as etf and Treasury Demand Surges, With Eth Trading at $ 4,524.10, UP.
GOLD: Gold is Trading at $
Elsewhere in Crypto
- Stablecoin Boom Has Made Crypto Ramps ‘Sexier’ M & A Targets, Says Vaneck VC (Decrypt)
- WHY CIRCLE AND STRIPE (AND MANY ORHERS) Are Launching their Own Blockchains (Coindesk)
- Gemini Hires Goldmans, Citi, Morgan Stanley and Cantor As Lead Bookrunners for Its IT (Coindesk)
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Institutes Ramped Up BTC Exposure in Q2 Through Spot etfs Like Ibit and Crypto-Linked Stocks, Signaling Growing Comfort with The Asset Classes.
- Wall Street Institutions Significantly Increated Their Indirect Exposure to Bitcoin in Q2 Through Spot Etfs and Crypto-Linked US Stocks, Sec Filings Show.
- Brevan Howard Nearly Doubbled Its Position in Blackrock’s ishares Bitcoin Trust to $ 2.3 Billion, While Goldman Sachs, Wells Fargo, and Cantor Fitzgerald-Stoc.
- Norway’s Sovereign Wealth Fund Also Grew Its Indirect Bitcoin Exposure by 192% Year-Over-Year by Investing in Companies Like Microstrategy and Coinbase, Thouh The Position of the Position Trillion Portfolio.
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