The Galaxy Digital Search Branch disclosed in a June 4 report that the interplay between centralized and decentralized cryptographic loans heightens systemic risk. By March 31, over $39 billion in crypto-backed debt circulated in decentralized loan apps, centralized lenders, and stablecoin transmitters. DEFI activities comprised 45.3%, centralized sites 34.6%, and stablecoin guarantees 20.1%. Galaxy notes that the interconnectedness amplifies market volatility due to automatic liquidations, potentially impacting assets like Bitcoin, Ethereum, and Steth. Business treasuries further complicate the credit landscape, with companies issuing $12.7B in debt to finance crypto holdings. This intricate web of credit channels enhances borrowing capacity but also intensifies shock transmission within the cryptomarkets.
https://altcoin.observer/the-systemic-risk-increasing-while-leverages-are-tightened-between-the-vouchers-of-the-cefi-defi-and-crypto/
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