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Subprime auto loan defaults just hit a danger zone we haven't seen in three decades. The 60-day delinquency rate for subprime car loans spiked to 6.65% — the worst reading since 1994. Yeah, that's right, before most crypto natives were even born.
What's driving this? Simple: consumers are getting crushed. Higher interest rates, stubborn inflation, maxed-out credit cards. People are struggling to keep up with monthly payments, and cars — being depreciating assets — are first on the chopping block when budgets get tight.
Why should you care? Because credit stress doesn't stay contained. When subprime borrowers default en masse, it ripples through the financial system. Banks tighten lending. Risk appetite shrinks. And when traditional markets get spooked, crypto often feels the aftershock — sometimes as a flight to alternative assets, sometimes as collateral damage in a broader selloff.
Keep your eyes on consumer credit data. It's a leading indicator, and right now, it's flashing yellow.