The real question is where do they borrow the money from?
If lenders were doing their due diligence properly (as in: I'm going to lend you a 100 grand, but you had better explain what you're going to do with it and how I'm going to get it back plus some interests), then I see zero problem with people borrowing to buy risky assets such as crypto.
If lenders are to dumb or lazy to do their work, I see this as a win for the ecosystem when they get liquidate by a crypto crash: they'll probably be a little more careful next time they lend money or altogether go do something else.
In other words: the problem is not with borrowing to bet on crypto, but with the facts that it's all too easy for financial institutions to lend other (unsuspecting) people's money to huge credit risk borrowers (just like in 2008).
If lenders were doing their due diligence properly (as in: I'm going to lend you a 100 grand, but you had better explain what you're going to do with it and how I'm going to get it back plus some interests), then I see zero problem with people borrowing to buy risky assets such as crypto.
If lenders are to dumb or lazy to do their work, I see this as a win for the ecosystem when they get liquidate by a crypto crash: they'll probably be a little more careful next time they lend money or altogether go do something else.
In other words: the problem is not with borrowing to bet on crypto, but with the facts that it's all too easy for financial institutions to lend other (unsuspecting) people's money to huge credit risk borrowers (just like in 2008).