Crypto borrowing activity is undergoing a huge shift as decentralized finance (DeFi) contracts sharply during the current latest market correction, while centralized finance (CeFi) shows early signs of recovery.
New research from CryptoQuant highlights how changing risk appetite and liquidity needs are reshaping borrowing behavior in the crypto ecosystem.
According to CryptoQuant’s latest dashboard, decentralized borrowing has followed the decline in cryptocurrency prices. Since August, borrowing volumes on major DeFi protocols have fallen as traders reduce their leverage and exposure.
CryptoQuant reports on Aave, one of the largest DeFi lending platforms, that weekly borrowings of USDT and USDC stablecoins fell 69%, from a peak of $6.2 billion to just $1.9 billion at the end of November.
This contraction also closely mirrors the broader market downturn, suggesting that users are actively reducing their leverage rather than deploying new capital.
Despite the sharp decline in new borrowing, Aave still maintains outstanding loans of $16.3 billion, showing the scale of DeFi credit markets even during periods of stress.
The drop in additional borrowing indicates a clear reduction in speculative risk-taking in decentralized markets, reports CryptoQuant.
Centralized borrowing activity initially followed a similar downward trajectory during the market correction, but recent data suggests a divergence may emerge.
CryptoQuant also notes that CeFi platforms are starting to see a recovery in borrowing demand even as prices continue to weaken.
On Nexo, weekly retail credit withdrawals fell sharply, from $34 million in mid-July to $8.8 million in mid-November. However, the following week saw a strong rebound to $23 million, a 155% week-over-week increase.
This behavior also indicates that users may increasingly choose to borrow against their crypto holdings rather than sell assets at depressed prices.
The rebound suggests that CeFi platforms serve as a safety net during market declines, allowing investors to access liquidity while maintaining long-term exposure to cryptocurrencies.
CryptoQuant’s analysis highlights the structural importance of centralized lenders during periods of market stress. While DeFi borrowing tends to contract quickly as leverage decreases, CeFi platforms often absorb demand for liquidity when investors seek flexibility and capital preservation.
Nexo’s cumulative credit withdrawals reached $817 million in 2025, making it one of the most active places for cryptocurrency-backed lending this year.
