Crypto Lending Market Down 43% From Bull Market Peak: Galaxy Report

While the crypto lending market is still struggling to regain the heights reached during the peak of the 2020–2021 bull run, it has nevertheless been recording strong momentum.

As of Q4 2024, the total size of the crypto lending market—including crypto-backed collateral debt position (CDP) stablecoins—stood at $36.5 billion, according to a new report by Galaxy. That marks a 43% decline from the all-time high of $64.4 billion recorded in Q4 2021.

Despite this drop, the top three centralized finance (CeFi) lenders–Tether, Galaxy, and Ledn— closed Q4 2024 with $9.9 billion. Together, they comprised 88.6% of the CeFi lending market and 27% of the total crypto lending market.

Meanwhile, decentralized finance (DeFi) climbed 959% to $19.1 billion in open borrows in Q4 2024 from a low of $1.8 billion in Q4 2022, the report noted. While DeFi's market share appears to have grown substantially, the report cautioned that “there is potential for double counting between total CeFi loan book size and DeFi borrows.”

These findings underscore the importance and maturation of crypto lending in the digital asset space. “Lending and borrowing capabilities have emerged as foundational pillars of both decentralized and centralized crypto finance, creating essential market mechanisms that parallel traditional financial systems while introducing novel technological innovations,” the report reads.