The lever effect through the economy of cryptography is evolving, and not to evaporation.
The total cryptocurrency loan dropped by 4.9% over the quarter to 39.07 billion dollars, the first drop since the end of 2023, according to the Q1 2025 report by Galaxy Research. But while the title number contracted, the underlying dynamics suggest that the lever effect is a speed of speed change, and not discoloration.
Loans in decentralized financial loans (DEFI) took a safe hit at the beginning of the quarter, slipping up to 21%, before bouncing strongly in April and May. The turnaround was largely driven by the integration of aave of the pendle tokens, whose compatible structure and the high loan / value ratios (up to 90%) triggered a wave of fresh loans. At the end of May, DEFI loans increased by more than 30% reduction on the stockings, Ethereum leading the recovery.
Centralized financing loans (CEFI) climbed 9.24% to $ 13.51 billion, led by Tether, LEDN and two premiums. However, Galaxy notes that a narrow set of public disclosure limits visibility in the true scope of centralized loans. Private offices, over-the-counter platforms and offshore credit suppliers probably push the much higher real total. Maybe 50% or more.
Meanwhile, Bitcoin
Treasury companies are quietly becoming a new system of systemic lever. Companies like Strategy (MSTR) have made billions of convertible debts to finance BTC purchases. In May, the total debt in circulation between cash companies amounted to $ 12.7 billion, a large part of it which matured between 2027 and 2028.
In derivatives, the growing concern of CME in particular for ether
The term signals accelerate institutional participation. At the same time, hyperliquid, Upstart Exchange Hyperliquid, has widened an increasing part of the perpetual term market, highlighting the continuous force of the lever effect focused on retail.
The report underlines an increasingly interconnected market structure, that where stress in a single place or instrument could quickly pass through the ecosystem. The lever, in the current cycle of the crypto, can be more fragmented than before – but it is no less powerful.
