Households are heading into the new year with less financial breathing room than usual.

Holiday spending hit new records in 2025, but it came with a growing reliance on debt, and that strain may soon ripple into risk markets, including crypto.

At the same time, leverage across digital asset markets has quietly rebuilt. While the structures look more conservative than in previous cycles, the combination of consumer pressure, elevated leverage and a major derivatives reset could make early January unusually volatile for the crypto market.

Consumers enter the new year already stretched

U.S. consumers took on more debt this holiday season, even as confidence in the economy weakened.

According to a December report cited by CNBC, 37% of Americans accumulated holiday-related credit card debt, averaging $1,223, up from the previous year.

Matt Schulz, LendingTree’s chief consumer finance analyst, said higher prices are forcing households to lean more heavily on credit.

“Even sticking to the same shopping list as last year can cost more now,” Schulz said.

But many consumers still remain reluctant to cut back on holiday expenses, he added.

The pressure is compounded by high borrowing costs. Credit card interest rates now average around 20%, according to Bankrate .

Consumer sentiment is also slipping. The Conference Board’s Consumer Confidence Index fell to 89.1 in December—lowest since April—while future expectations remained well below levels historically associated with economic expansion.

When households face rising bills in January—from credit cards to student loans—discretionary investing is often one of the first areas to shrink.

Debt accumulates across crypto market

Rising debt is not limited to traditional retail traders.

According to Galaxy Research, crypto-collateralized lending reached a new record high of $73.6 billion in the third quarter of 2025, surpassing the previous peak hit during the 2021 bull market.

Galaxy also tracked more than $12 billion in debt tied to digital asset treasury strategies, where publicly listed companies use borrowed capital to accumulate crypto on their balance sheets.

Michael Saylor-led Strategy (Nasdaq: MSTR), earlier MicroStrategy, remains the largest borrower, carrying roughly $8.2 billion in outstanding debt linked to its Bitcoin holdings, while other firms have used leverage to build exposure to Ethereum and Solana-linked assets.

Leverage has also expanded across crypto’s institutional and corporate layers in 2025, adding another source of potential stress if prices drop sharply.

Futures exposure also surged, with total open interest climbing to over $220 billion in early October before sharp liquidations reset positioning.

While Galaxy notes that today’s leverage is more transparent and better collateralized than in 2021, it remains deeply embedded in market structure - and more widely distributed across lenders, derivatives venues and corporate balance sheets.

“Loans outstanding, futures open interest, and digital asset treasury debt all reached new highs in Q3 2025,” the firm wrote.

The Wall Street Journal also reported that both institutional and retail traders now have unprecedented access to leveraged products - from perpetual futures to crypto-backed lending - amplifying both gains and losses when prices move.

Massive options expiry adds short-term pressure

Near-term volatility could intensify around derivatives mechanics alone.

On Dec. 26, nearly $23.7 billion in Bitcoin options are set to expire, the largest single expiry of 2025. More than 268,000 contracts will roll off at once.

Crypto trader Crypto Rover noted that such expiries often lead to choppy price action as dealers hedge exposure.

“Large players hedge these positions in spot and futures,” he said, adding that this hedging creates real buying and selling pressure regardless of sentiment.

Glassnode echoed that view, saying the expanding options market has made hedging flows increasingly important.

“This record expiry will reset positioning and dealer exposure,” the firm wrote, adding that volatility often picks up after the New Year.

Why January could feel unstable

When one puts together all these factors, they form a fragile setup.

Households facing post-holiday bills may pull back from risk assets. Leverage-heavy crypto markets can magnify small moves. And a major derivatives reset can distort price action over this weekend.

The result isn’t necessarily a crash, but January may act as a stress test, revealing where liquidity is thin and positioning is crowded as 2026 begins.

This story was originally published by TheStreet on Dec 24, 2025, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.