Crypto lending market plunges 43% as CeFi collapse reshapes market, survey shows

The total size of the crypto lending market fell to $36.5 billion in Q4 2024, down more than 40% from its all-time high in late 2021.

The crypto lending market remained far from its former highs at the end of Q4 2024, with analysts at Galaxy Digital estimating total loans outstanding at $36.5 billion, well below the $64.4 billion peak seen in late 2021. In a research report on April 14, Galaxy attributed the decline to the “decimation of lenders on the supply side, and funds, individuals, and corporate entities on the demand side.”

CeFi lenders were hit the hardest during the 2022–2023 downturn. Some of the largest centralized finance lenders by loan book size “crumbled in 2022 and 2023” as crypto asset prices broke down and “liquidity in the market dried up,” Galaxy wrote. Firms like Genesis, Celsius Network, BlockFi, and Voyager all filed for bankruptcy.

CeFi lending peaked at an estimated $34.8 billion, but a wave of bankruptcies appears to have driven the market down 82% to $6.4 billion, according to the data. The top three CeFi lenders — Tether, Galaxy, and Ledn — held a combined loan book of $9.9 billion, or 88.6% of the CeFi market. That compares to Q1 2022, when Genesis, BlockFi, and Celsius made up 76% of the market.

Decentralized finance lending has recovered more strongly. Open borrows across 20 lending apps and 12 blockchains rose to $19.1 billion by Q4 2024, a 959% increase from the $1.8 billion low in Q4 2022, what Galaxy described as a “testament to the design and risk management practices of the large onchain lending apps.”