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Not long ago, that cryptography looked like the most radioactive ruin in industry. Blockfi, Celsius, Voyager, Genesis, once the industry leaders implodged in the big washing in 2022-2023, annihilating $ 25 billion in loans and a large part of the credibility of the sector.
Now, a new Galaxy Digital report suggests that a partial resurrection is underway, led by a familiar distribution of survivors. Tether, Galaxy and LEDN have become the dominant players in centralized financial loans (CEFI), holding $ 9.9 billion in suspended loans at the end of 2024. It is almost 90% of the CEFI market, according to the Zack Pokorny of the Galaxy research.
The cryptography loan exists for several of the same reasons as the traditional loan. Traders borrow short tokens or increase the lever effect, long -term holders unlock liquidity without selling, companies contract loans to finance operations and lenders earn a passive return on inactive assets.
Today, the total market for cryptography loans amounts to $ 36.5 billion, still 43% lower than its peak of $ 64.4 billion at the end of 2021. But the composition of this market changes quickly. DEFI platforms now represent 63% of the borrowing of cryptography (excluding stablecoins supported by crypto), almost double their share during the last Bull Run.
Cryptographic loans are retreating, DEFI applications conducting recent growth.
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The state of centralized cryptographic loans
At its peak at the end of 2021, 2022, centralized cryptographic loans were dominated by Genesis, Celsius and Blockfi, which controlled 76% of the market together. Then came the crash: the drop in the prices of tokens, the management of the sloppy risks and the toxic guarantees triggered a credit on the scale of the industry. In the first quarter of 2023, CEFI’s total loan book collapsed at $ 6.4 billion. Since then, it has returned to $ 11.2 billion, a rebound of 73%, but is still down two -thirds of its peak.
A new trio has filled the void:
- Tether, known for a long time for his stablecoin at point in dollars, has become a heavyweight lender.
- Galaxy Digital, the crypto conglomerate of the Mike Novogratz billionaire, identifies with one of the largest active loan books in the industry.
- LEDN, a lender focused on Bitcoin, based in Toronto, completes the new cartel.
Together, they control 89% of what remains of centralized cryptographic loans and 27% of the overall cryptographic loans during the inclusion of stablescoins supported by Crypto.
The silent ascent of deffi
While institutional lenders like Galaxy and LEDN fought to stay afloat, the protocols Defi discreetly widened their market share. Platforms like Aave and Compound, governed by the code, require borrowers display more guarantee than they take, thus eliminating a large part of the credit risk that is paralyzed from the ECFI.
At the bottom of the bear market in the fourth quarter of 2022, the borrowing DEFI had dropped to only $ 1.8 billion. He has been dollars on 20 platforms on 12 blockchains for over ten times to $ 19.1 billion. Ethereum remains the main blockchain for Defi loans, with $ 33.9 billion in assets deposited in March 2025. The loan, in fact, remains the largest use case for decentralized finances.
The stable stables supported by Crypto as the USD of $ 7 billion and the $ 5 billion Ethena USDE – the third and fourth largest stablecoins after the complexity of Tether and Circle – ADD. In the case of the USDs, users lock their crypto (for example, Ether) in an intelligent contract as a guarantee, which then emits stablecoins. To minimize the risk of defect, the value of the warranty must exceed the value of the tokens issued. The USDE, on the other hand, is based on a Delta coating strategy, combining a cryptographic guarantee with short positions in the derivative markets to maintain its ankle at $ 1. Galaxy notes that there can be a double counting between centralized and decentralized loan books, because institutional lenders often use these protocols and other DEFI protocols to create loans for their customers.
The prospects
“The loan rate against Bitcoin now increases from 5.5% to 7%. This is down compared to what we have seen in the past few months. Blockchain. “I think that many things arise if the yield of 10 years is a little controlled, and if the Fed will begin to see a certain reduction in inflation and an improvement of the employment numbers. Then we will see a drop in rate, and this will be beneficial for the prices of cryptographic assets. ”
The winds have already evolved in favor of a broader institutional school year. In July, Cantor Fitzgerald, the main guardian of the Tether warranty, announced his intention to launch a Bitcoin finance company of $ 2 billion to provide a lever effect to Bitcoin holders (the American secretary in trade Howard Lutnick is the former president and CEO of Cantor. And in January, the American Securities and Exchange Commission (SAB) 121, softening the restrictions on the way in which the listed companies treat the cryptographic assets held by customers. Lever effect on these products already widens the market.
“(Cantor Launch) will define an interesting trend, because Bitcoin is a very liquid active that is negotiated 24/7 in the world. It is much more liquid and transparent than conventional fixed income, while paying a return comparable to an obligation of investment quality. Many large institutions have a bitcoin, which is able to transform this into a fixed income product where they can gain a return is very attractive, ”adds Powell. “We, among others, examine how we can pack and tokenize this asset for institutional consumption.
Maple recently launched a product in partnership with Core, the creator of a Bitcoin token bearing the yield, which allows institutions to win a return on their bitcoin in kind. “We have already seen $ 50 million in entries in less than two months,” says Powell. “I am interested whether it becomes something of a Trojan horse so that the institutions do more chain.”
