Bitcoin Loans Are Back, But Rehypothecation Still Lingers

Bitcoin creditors bet that stricter controls and clearer risk management can rebuild confidence in the industry that is still persecuted by the collapse of the predecessors of Celsius and Blockfi.

Main creditors of the bitcoins of the previous cycle after turning User deposits in insufficiently scared loans. When bitcoin (BTC) Prices have fallen and liquidity has dried up, billions of customers have been frozen or away.

However, these implosions do not prove that the loan crypto is sentenced to the proposal. Disorders were largely the result of poor risk management than the model itself. Some platforms now take the right steps, such as an excessive spot, and at the same time promote stricter Prague liquidation, according to Alice Liu, the head of research in Coinmarketcap.

“Better transparency and third -party binding also help reduce the risk of counterparty compared to opaque models such as Celsius,” Caintelegraph said.

But even as some dates of the leaves promise now No rehypothecation And lower loan ratios to value (LTV), sudden price fluctuations in bitcoins can still build credit models for stress.

Bitcoin loans develop from era Celsius models

Friday creditors such as Blockfi and Celsius revealed shortcomings in the way the early crypto creditors managed the risk. Their models relied on Rehypothecation, poor liquidity management and overrated bets wrapped in an opaque structure that gave clients a little view of how their assets are governed.

Rehypothecation is a practice borrowed from traditional financing, where brokers are re -used by the client’s collateral for their own shops. It is a common and regulated strategy, but is usually limited and published to clients with strict reserve requirements.

Platforms like Celsius and Blockfi routinely re -used customer depositsOften without clear publication of capital buffer memories or regulatory limits and exposure to the counterparty and liquidity risks. The key difference was that Celsius aggressively selling retail investorsWhile Blockfi had a stronger institutional track. Blockfi relationship with now bankrupt Crypto Exchange FTX and sister company Alameda Research proved to be as well as toxic.

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According to Liu, the lending market in the current cycle lies from ripe investors and less “retail degen”. This means that the means locked for loans with collateralized bitcoins are longer -term holders, company cash registers and institutional funds.

“Their motivation now focuses on approach to liquidity, tax optimization or diversification, not agriculture,” Liu said. “This reduced the pressure on the products to compete with better conditions; instead, the security and risk assessment in the forefront of the product ranked to the user.”

Rehypothecation is still worried about many cryptors of burned Celsius. Platform as Strike – Operate Maximist Jack Malllers Bitcoins – have promised to never rehypothecate Bitcoin customer, while those who have taken steps to explain how the model works and helps to reduce loans due to greater transparency.

“Some players are still rehypoting BTC, which means they use the collateral for unsecured loans elsewhere. This is basically the same” Black Box “model we saw in 2021-2022,” said Wojtek Pawlowski, CEO and co-founder of responsibility.

“So, whether it’s healthy or risky, it depends on the real structure and how transparent it is.”

Bitcoins supported loans represent a comeback

Crypto-atenatized credit companies were among the largest growing stars of the crypt a few years ago. Galaxy Research estimates that its combined credit book reached a peak at $ 34.8 billion in the first quarter of 2022.

In the second quarter of the same year, however, the collision of Terra Stablecoin launched a number of bankruptcies throughout the sector. In the disaster, the main creditors such as Blockfi, Celsius and Voyager Digital were caught.

The size of the book lending has grown to $ 6.4 billion, which is 82% decrease compared to its slings. The Bitcoin loan model has been gaining traction and since the end of the first quarter of 2025 it has recovered to $ 13.51 billion in an open CEFI loan, which represents 9.24% quarterly growth, Galaxy’s research was estimated.

Today’s lending models have accepted improved risk controls such as LTV ratios and clear instructions for Rehypothecation. However, the main structural risk is that the whole model depends on the volatile asset such as Bitcoin.

Business models of creditors, such as Celsius and Blockfi, were already fragile, but their cracks began to expand to a full crisis when bitcoins prices fell.

Related: The US Mortgage Regulator for Housing Consists Bitcoins in the middle of the housing crisis

Modern creditors have dealt with many of these problems through excessive modesty and stricter margin recovery. But even conservative LTV can quickly unfold in sharp decreases.

“BTC remains volatile where price drops of 20% can still cause mass disposal despite actively platform [monitoring] LTV and [enforcing] Calling margin in real time. If the platforms are covered with collateral into yield strategies (rehypothecation, defined agriculture, etc.), the risk is returned, ”Liu said.

Safer models borrowing bitcoins are not bulletproof

Bitcoin volatility has stabilized compared to early years, but remains susceptible to sharp daily fluctuations.

At the beginning of 2025, Bitcoin often ranged from 5% per day at the global tension of trade, according to Coingecko, even immersed $ 77,000.

“[Bitcoin-backed loans] They are safer, but not bulletproof, ”said Sam Mudie, co -founder and CEO of the tokenized investment company Savea.

Even at lower LTV and deadlines that now prohibit rehypothecation, Mudie warned that the creditors still work with a collateral pool with one asset whose value may drop by 5%overnight.

Bitcoins loans unlock new cases of financial use. As cutelegraph reported On June 15, Bitcoin-Cooseralized loans allow liquidity to click on liquidity without selling their shares, helping them avoid capital profits and even access to the real estate market.

But bitcoin purists remain careful. These cases often include traditional financial intermediaries and legal systems and introduce new layers of risk.

“Using bitcoins to buy a house is a great title. [Bitcoiners] You also know that real estate is taking place by many older systems, not just intelligent contracts, ”Mudie said.

Instead, Mudie imagines multiple models of cryptoral loans: shared multisignature wallet, public onchain visibility, hard limits for reuse of collateral and automatic margin call when prices fall. He added that platforms can further protect users by lending only up to 40% of the security value.

For the time being, bitcoin -supported loans undergo a cautious recovery by the driven stricter controls and a stronger understanding of the risks that reduced its first wave. However, as long as the volatility is resolved at the root, the safest models will have to remain.

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