Signs of Recovery Emerge in Crypto Lending Market

According to BlockBeats, a report by Galaxy Research highlights that the crypto lending market is showing signs of recovery, particularly in the decentralized sector, despite remaining below pre-2022 levels. As of the end of 2024, the total market size reached $36.5 billion, including loans backed by crypto-collateralized stablecoins. This marks a significant decline from the $64.4 billion peak during the 2021 bull market, driven by speculative fervor. The downturn in the market is attributed to the collapse of major lending institutions such as Celsius, BlockFi, and Genesis, leading to a few large players dominating the centralized finance (CeFi) lending space. The report notes that Tether holds the largest market share, followed by Galaxy and Ledn, with these three entities accounting for nearly 90% of the $11.2 billion in outstanding CeFi loans. CeFi loans have decreased by 68% from their peak of $34.8 billion in early 2022. In contrast, significant growth is occurring on-chain. Decentralized lending protocols, which allow users to borrow crypto assets by locking collateral, operate continuously without reliance on centralized entities and are expanding rapidly. Galaxy Research indicates that since the market bottomed out at the end of 2022, decentralized finance (DeFi) outstanding loans have surged by 959%, rising from $1.8 billion to $19.1 billion, spanning 20 applications and 12 blockchains.