Crypto Leverage Hits Record High in Q3 as DeFi Dominance Reshapes Market Structure: Galaxy

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Crypto Leverage Hits Record High in Q3 as DeFi Dominance Reshapes Market Structure: Galaxy Onchain lending drove crypto-collateralized debt to a new peak in last quarter, but the leverage underpinning the market is now better collateralized than during the previous cycle. By Oliver Knight , AI Boost | Edited by Stephen Alpher Nov 19, 2025, 7:15 p.m. Crypto leverage hits record high in Q3 (Creative Commons) What to know : Onchain lending accounts for 66.9% of all crypto-collateralized borrowing, with DeFi loans hitting a record $41 billion, boosted by incentives, new collateral types and rapid growth on emerging chains like Plasma, according to a report from Galaxy Digital. Centralized lenders grew outstanding loans 37% to $24.4 billion, but with far tighter collateral requirements; Tether controls nearly 60% of tracked CeFi lending. The $19 billion Oct. 10 liquidation cascade was the largest in history, but Galaxy says it reflected exchange risk systems, not a buildup of systemic credit risk. Crypto-collateralized borrowing surged to a record $73.6 billion in the third quarter, marking the sector’s most levered quarter on record, yet the composition of that leverage looks significantly healthier than during the 2021–22 cycle. According to Galaxy Research , the sharp rise was driven overwhelmingly by onchain lending, which now represents 66.9% of all crypto-collateralized debt, up from 48.6% at the previous peak four years ago. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms of use and privacy policy . DeFi lending alone jumped 55% to an all-time high of $41 billion, supported by points-driven user incentives and improved collateral types such as Pendle Principal Tokens. Centralized lenders also saw a rebound as borrows grew 37% to $24.4 billion, though the market remains a third smaller than its 2022 peak. Centralized lending graph (Galaxy Research) Survivors of the last cycle have largely abandoned uncollateralized lending, turning toward full-collateral models as they seek institutional capital or public listings. Tether remains the dominant CeFi lender, holding nearly 60% of tracked loans. The quarter also saw a decisive shift within DeFi itself, with lending apps now capturing more than 80% of the onchain market, and CDP-backed stablecoins shrinking to 16%. New chain deployments, including Aave and Fluid on Plasma, helped fuel activity, with Plasma attracting more than $3 billion in borrows within five weeks of launch. It's worth noting that shortly after the end of Q3, a leverage-induced wipeout occurred resulting in more than $19 billion worth of liquidations, the largest single-day cascade in crypto futures history. Still, Galaxy's report claims the liquidation event did not reflect systemic credit weakness: most positions were mechanically de-risked as exchanges’ auto-deleveraging systems kicked in. Meanwhile, corporate digital-asset treasury (DAT) strategies continue to rely on leverage, with more than $12 billion in outstanding debt tied to crypto-acquiring firms. Total industry debt, including DAT issuance, hit a record $86.3 billion. The data suggests crypto leverage is rising again, but on firmer, more transparent footing, with collateralized structures replacing the opaque, unbacked credit that fueled the last boom-and-bust cycle. Leverage Derivatives DeFi AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . More For You Protocol Research: GoPlus Security By CoinDesk Research Nov 14, 2025 Commissioned by GoPlus What to know : As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M. GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month. Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B. View Full Report More For You Bitcoin Slips Back Below $90K — Crypto Correction Now Ranks Among Worst Since 2017, K33 Says By Krisztian Sandor | Edited by Stephen Alpher 2 hours ago After a rare spot of outperformance on Tuesday, bitcoin has resumed sliding, with one analyst eyeing $84,000–$86,000 as potential local bottom. What to know : Bitcoin fell below $90,000, losing 4.2% during early U.S. trading hours on Wednesday, while ether dropped 6% to under $3,000. Crypto-related equities more than mirrored the decline, with Strategy (MSTR), BitMine (BMNR) and Circle (CRCL) booking 8%-9% selloffs. Bitcoin’s current slide from its early October record at $126,000 ranks among the steepest 43-day drawdowns since 2017, K33's research head said. 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