The Crypto-Loan Market is still a shade of its earlier size prior to the brutal 2022-2023 crypto winter, but below the surface signs of improvement have occurred, especially in the decentralized corner of the room, the digital asset investing company Galaxy Research said in a report Monday.
The total crypto loan market amounted to $ 36.5 billion by the end of 2024, including loans supported by cryptocollateralized stableecoins, according to the report. It is a steep fall from the top of $ 64.4 billion seen at the height of the Turdy Exchange in 2021, as loans against crypto rose in the midst of a wave of speculative innerness.
The downturn, driven by the collapse of larger lenders such as Celsius, Blockfi and Genesis, left a few great players to dominate the centralized financing sector (CEFI) in the lending space. According to the report, Tether can boast the largest market share, followed by Galaxy and LEDN. These three units account for nearly 90% of the outstanding loans in the CEFI -Lock Book of $ 11.2 billion. In particular, CEFI loans are down 68% from the early 2022 top of $ 34.8 billion.
The real growth is to play out at chain found the report.
Decentralized lending protocols that allow users to borrow crypto by locking security operating around the clock and without relying on a centralized device has expanded rapidly. Since the market has been tied up by the end of 2022, open defi loans have risen 959%and climbed from $ 1.8 billion to $ 19.1 billion across 20 applications and 12 blockchains, Galaxy said.
“Looking ahead, cryptocurrency appears ready for a new growth phase, characterized by improved risk management frameworks, greater institutional participation and clearer regulatory guidelines,” the Galaxy Research Analytt Zack Pokorny wrote.
“As the sector continues to mature, it may well serve as a bridge between traditional funding and the new digital activist ecosystem, facilitating wider adoption of cryptocurrency-based financial services,” he added.
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