History of Bitcoin-Backed Lending Crises

Major liquidations and platform collapses that shaped current industry standards for collateral and risk management.

The top 3

  1. Celsius Network Insolvency: The 2022 collapse of Celsius highlighted the dangers of rehypothecating user collateral to chase yield in volatile markets. Celsius Network
  2. BlockFi Liquidity Event: BlockFi faced a liquidity crunch in 2022 due to heavy exposure to Three Arrows Capital, leading to its eventual bankruptcy filing. BlockFi
  3. Evolution of Margin Calls: Industry standards shifted from human-monitored accounts to automated, smart-contract-enforced liquidations to prevent systemic contagion.

Sources

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