Virtual asset lending hits record high of $73.6 billion in Q3

The global virtual asset (cryptocurrency) lending market continued its upward trend in the third quarter and reached an all-time high.

According to Bloomberg on the 6th (local time), as of the end of September global virtual asset lending totaled $73.6 billion. This surpasses the previous record of $69.4 billion recorded in the fourth quarter of 2021. It is roughly three times the amount in the first quarter of this year (about $25 billion).

Galaxy Digital said, "The recovery in the virtual asset lending sector accelerated after the approval of the U.S. bitcoin spot ETF," and added, "With a strengthened pro-crypto stance in the second term of the Donald Trump administration, loan demand has steadily increased."

Virtual asset lending is considered a representative market indicator used by individual investors to increase leverage or boost returns, and by institutional traders or hedge funds to secure short-term liquidity. Recently, the "digital asset treasury management (DAT)" model, in which companies borrow cash against their held virtual assets as collateral to generate returns, has also been spreading.

However, Bitcoin has fallen more than 20% in recent weeks, raising market tensions. This resembles the situation at the end of 2021 when, just after the lending market peaked, a series of major bankruptcies and scandals erupted and the cryptocurrency market collapsed. At that time, major lending platforms such as Celsius, BlockFi, and Voyager collapsed in succession.