The size of the crypto loan market fell by more than 43% compared to its 2021 summit of $ 64.4 billion, falling to 36.5 billion dollars at the end of the fourth quarter of 2024, according to a Galaxy Digital report published on April 14. This decline began in 2022, following the collapse of several main centralized finances (CEFI), including Genesis, Celsius Network, Blockfi, and travel. These companies have filed a bankruptcy while cryptography prices have dropped, resulting in a significant reduction in supply and demand for cryptographic loans.
The impact on CEFI loans was serious. At its peak in 2022, Cefi Lending had a combined book size of $ 34.8 billion. At the end of 2024, it fell to $ 11.2 billion, a drop of 68%. According to Zack Pokorny, Galaxy digital research partner, “the decline can be assigned to the decimation of lenders on the supply and funds, individuals and corporate entities on the request side.” He noted that centralized lenders who had filed a record no longer operates, which has greatly reduced the borrowing options available in space.
Despite the slowdown in the global loans market, the loan loan thanks to decentralized financing platforms (DEFI) has experienced a strong recovery. After reaching a minimum of $ 1.8 billion in employees opened during the bears market at the end of 2022, DEFI borrowings increased to $ 19.1 billion by the end of 2024. This represents an increase of 959% compared to eight trimesters. The report indicates that this recovery is due to the nature without authorization of the DEFI platforms, which allowed them to remain operational while the CEFI platforms stop. “Unlike the greatest CEFI lending, who went bankrupt and who no longer work, the largest loan applications and the markets were not all forced to close and continued to operate,” wrote Pokorny.
The DEFI loans now cover 20 loan applications and 12 blockchains, showing that decentralized platforms have maintained the interest of users even during periods of volatility on the market. On the other hand, the CEFI sector has become more concentrated. Three companies – Tether, Galaxy and LEDN – now represent 88.6% of all remaining CEFI loans and 27% of the total cryptography loans.
Although the total market does not return to its previous heights, the high performance of the DEFI loan indicates a change in the structure of the cryptography landscape. The report stresses that although the CEFI has contracted strongly, the DEFI platforms have succeeded in recovering and developing, reporting a continuous demand for decentralized financial services even if centralized options have decreased.
