Crypto Lending Looms as Bitcoin Plummets Below $70K; 2025 Bull May Face 2022-Style Winter

Bitcoin BTCUSD fell to below $70,000 on Feb 7, 2026, amid a full-bore winter likely to last more than a year, according to Bitwise’s Matt Hougan. The decline follows a peak above $126,000 in October 2025 and echoes the 2022 bear after the 2021 bull. Crypto-collateralized lending, a volatile but growing market, reached $73.6B in November, per Galaxy Research, with Q3 DeFi loans hitting $41B, up about 55% from the prior quarter. Platforms like Coinbase, Binance, and Firefish allow loans of stablecoins or yield using BTC or ETH collateral, often with LTVs of 50%–75%. Ultra-high-net-worth borrowers and 401(k) alternatives are increasingly using crypto as collateral, despite risks of prolonged price weakness and leverage-driven drawdowns. Hougan warns the winter began in January 2025 and could persist through 2026, with those who borrowed against BTC facing the steepest declines.