Increase in Crypto-Backed Lending Amid Bear Market, A Funding Alternative to Selling = CryptoQuant

Increase in Borrowing During Bear Market

Crypto asset analysis firm CryptoQuant reported on the 2nd that it investigated the actions of whales (large holders) and individual investors during a bear market. They analyzed that there has been an increase in the number of investors who choose to borrow against their assets as collateral rather than selling them.

According to data from the cryptocurrency lending service "CoinRabbit," the average number of borrowings per investor has increased since the onset of the bear market in 2026 compared to the bull market in 2025.

Specifically, individual investors (retail) saw an increase of +74% (from 30.8 times to 53.5 times), while high-net-worth individuals (HNWI) increased by +18% (from 16.5 times to 19.4 times). This indicates a stronger trend of raising funds through borrowing instead of selling.

Additionally, CryptoQuant pointed out that the percentage of repeat borrowers has risen from 61.9% to 65.1%. For individual investors, the borrowing interval (the period from the last borrowing to the next borrowing) has nearly doubled (from 11 days to 21 days).

CryptoQuant analyzed that while individual investors are spacing out their borrowing intervals, there is a growing tendency for users to continue borrowing over a long period.

Changes in Collateral Assets

CryptoQuant also analyzed the assets used as collateral by high-net-worth individuals. The top asset is Bitcoin (BTC), followed by XRP, and third is Zcash (ZEC).

As for changes, the proportion of Bitcoin used as collateral by high-net-worth individuals has decreased from 57.8% to 30.5%, nearly halving. In contrast, the privacy-focused currency Zcash has surged from outside the top 10 to third place with 24.2%. Furthermore, Monero (XMR), Chainlink (LINK), and Cardano (ADA) have also increased. This indicates a diversification of collateral assets during the bear market.

CryptoQuant noted that the increase in Zcash as collateral is due to its price rising from $50 in September 2025 to the current $800. They analyzed that the variety of assets that high-net-worth individuals do not want to sell during a bear market has increased, leading to more assets being used as collateral for funding rather than selling.

On the other hand, the top collateral asset for individual investors remains XRP, followed by Bitcoin, and third is Ethereum (ETH). In 2026, a diverse range of altcoins (BNB, KAS, VELO, and others) have newly entered the top 10, broadening the scope.

CryptoQuant stated that the large proportion of collateral from XRP indicates the high enthusiasm of the individual investor community supporting this asset. The expansion of collateral assets during the bear market reflects the movement to raise cash using a more diverse range of assets without selling tokens while prices are stagnant.

From the above, CryptoQuant concluded that in a declining market, borrowing has become a viable means to continue investing. They stated that cryptocurrency holders are trying to navigate the bear market by using a wide range of assets they do not want to sell at low prices as collateral, avoiding panic selling.