Crypto Lending Market Sees Significant decline in Q4 2024
The crypto lending market shrank to $36.5 billion in Q4 2024, a 40% drop from its peak in late 2021. Galaxy Digital analysts noted this decline in a report on April 14. They attributed the fall to the collapse of lenders and reduced demand from funds, individuals, and corporations.
Centralized finance (CeFi) lenders suffered the most during the 2022-2023 downturn. Major players like genesis, Celsius Network, BlockFi, and Voyager filed for bankruptcy as crypto prices plummeted and liquidity vanished.cefi lending peaked at $34.8 billion but fell 82% to $6.4 billion due to these bankruptcies.
Currently, the top three CeFi lenders—Tether, Galaxy, and ledn—hold 88.6% of the CeFi market, totaling $9.9 billion. This contrasts with Q1 2022, when genesis, BlockFi, and Celsius controlled 76% of the market.
Decentralized finance (DeFi) lending, however, has shown resilience. Open borrows across 20 lending apps and 12 blockchains reached $19.1 billion by Q4 2024. This marks a 959% increase from the $1.8 billion low in Q4 2022. Galaxy Digital praised the robust design and risk management of on-chain lending apps for this recovery.
These trends highlight the challenges faced by CeFi lenders and the growing strength of DeFi platforms in the crypto lending space.
