Crypto lenders emerge from the ashes of last speculative bubble
Bitcoin past $100,000 for the first time is spilling over into the long-battered crypto lending sector, with decentralised finance applications leading the way this time.
Bitcoin’s funding rate — the premium paid by traders to open long positions in the perpetual futures market — skyrocketed in November, and is up more than 10 times from what it was in early June, indicating a rising thirst for leverage, according to digital-asset data tracker CoinGlass. Bitcoin has more than doubled this year, topping $100,000 on Wednesday for the first time amid optimism crypto will move further into the mainstream during the upcoming Trump administration.
The rally is helping the lending sector rise from the ashes of 2022 and 2023, when a slew of market participants went bankrupt after a rash of questionable loans. Crypto lending nearly tripled through the first nine months of 2024 from a year-earlier. While more of that activity is taking place over decentralized apps, overall volume is still far short of what it was during the heydays of 2021.
“Demand for Bitcoin-backed loans has surged as those who held from before look to utilize their wealth to purchase homes, cars, and start businesses,” said Mauricio Di Bartolomeo, co-founder of
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