NEW YORK, June 29 — Margin debt hit a record $1.42 trillion in May as equity financing costs climbed to their highest since December 2024, raising questions about leverage-driven rallies across all risk assets. The US stock rally has been fueled in part by borrowed money. That borrowing is now getting more expensive.
According to data from the New York Stock Exchange, margin debt — the money investors borrow to buy stocks — rose to $1.42 trillion in May. That is the highest figure on record.
The cost of that leverage has also risen. Financing costs for equity positions are now at their highest level since December 2024. When leverage gets expensive, it tends to tighten across all risk assets.
That includes cryptocurrencies. Bitcoin and other digital assets have moved in close correlation with the S&P 500 through much of 2026.
A pullback in leveraged equity positions often triggers simultaneous selling in crypto markets, as traders unwind positions across both asset classes to meet margin calls. The question now is whether the May peak in margin debt represents a top. Previous peaks in margin borrowing have often preceded market corrections.
When the cost of carrying that debt rises, the incentive to deleverage grows. For crypto markets, the timeline is worth watching. Bitcoin has held relatively steady in recent weeks, but the underlying leverage picture is shifting.
If margin debt begins to decline from the May record, the selling pressure could hit both stocks and digital assets. The US administration has not commented on the margin debt figures.
The Federal Reserve’s next policy decision is scheduled for late July. For now, the record shows one clear fact: the borrowed money that helped drive the rally is getting more expensive. What happens next depends on whether traders are willing to keep paying that cost — or whether they start to unwind.
