The investment firm Galaxy Digital raised alarms by indicating that leveraged crypto loans have returned to levels close to historical highs.
💥 The warning comes after a massive liquidation of $1 billion, a clear reminder of how leverage can amplify losses when the market moves against you.
🔎 Why does it matter?
Greater systemic risk: an excess of leveraged positions increases volatility and can lead to cascading falls.
Vulnerable markets: sharp movements in Bitcoin and altcoins can trigger automatic liquidations.
Lessons from the past: crises like that of 2022 showed how over-leverage can sink exchanges and funds.
📊 Current context
The crypto market continues to grow in institutional liquidity, but at the same time faces tensions due to high-risk practices. For Galaxy Digital, the sector needs better risk management and a more responsible use of credit in DeFi and CeFi platforms.
🚀 Despite the recent correction, analysts see that the interest in leverage also reflects confidence in a long-term bullish cycle, although accompanied by significant risks.
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