Crypto leverage has fallen to its lowest level since 2020, but the latest reset is unfolding without the kind of forced liquidations and counterparty failures that defined the 2022 collapse, according to Galaxy Research data.

Crypto-collateralized lending declined by $11.3 billion in Q2 2026, marking the third consecutive quarterly drop in borrowing activity. The pullback has pushed aggregate leverage across centralized lenders, decentralized protocols and derivatives markets back toward levels last seen before the COVID-era liquidity boom.

Leverage Falls Without A Market Shock

The key difference from previous deleveraging cycles is the absence of a systemic failure.

In 2022, the collapse of Three Arrows Capital, Celsius Network and…