Crypto Lending: From Zero to Hero? 🚀

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Oy vey! What a business!

What to know: Oy, such knowledge!

  • The crypto lending market? A measly $36.5 billion in Q4 2024! Still down 43% from the glory days of the 2021 bull market. Feh! 🙄
  • DeFi borrowing? Grew a whopping 959% from the 2022 bear market bottom! $19.1 billion across 20 protocols and 12 blockchains. Now that’s what I call chutzpah! 🎉
  • Tether, Galaxy, and Ledn? They’re hogging nearly 90% of the $11.2 billion outstanding loans by centralized lenders. Monopoly, anyone? 🤨

The crypto lending market is still a shadow of its former self, like a balding man’s comb-over. But beneath the surface, signs of recovery are emerging, especially in the decentralized corner of the space. Galaxy Research said so, and they should know, they’re probably in on it! 😉

The total crypto lending market stood at $36.5 billion at the end of 2024. A steep decline from the $64.4 billion peak seen at the height of the 2021 bull run. Oy, what a tragedy! 😭 Borrowing against crypto soared amid a wave of speculative fervor, like a bunch of yentas gossiping about the latest scandal. 🗣️

The downturn, fueled by the collapse of major lenders such as Celsius, BlockFi and Genesis, left a few large players to dominate the centralized finance (CeFi) sector of the lending space. According to the report, Tether boasts the largest market share, followed by Galaxy and Ledn. These three entities account for nearly 90% of the outstanding loans in the $11.2 billion CeFi loan book. Notably, CeFi loans are down 68% from the early 2022 peak of $34.8 billion. So, what are we gonna do with all this money? 💰

The real growth is playing out onchain, the report found. Like a good deli sandwich, the real flavor is on the inside! 🥪

Decentralized lending protocols, which allow users to borrow crypto by locking up collateral operating around the clock and without relying on a centralized entity, have expanded rapidly. Since the market bottomed in late 2022, open DeFi borrowings have soared 959%, climbing from $1.8 billion to $19.1 billion across 20 applications and 12 blockchains, Galaxy said. It’s like a bubbeleh baking challah – rising and rising! 🍞

“Looking ahead, the cryptocurrency lending market appears poised for a new phase of growth, characterized by improved risk management frameworks, greater institutional participation, and clearer regulatory guidelines,” Galaxy research analyst Zack Pokorny wrote. So basically, they’re making it up as they go along! 😂

“As the sector continues to mature, it may well serve as a bridge between traditional finance and the emerging digital asset ecosystem, facilitating broader adoption of cryptocurrency-based financial services,” he added. A bridge? More like a rickety old ladder! But hey, who am I to judge? 🤷‍♂️

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2025-04-15 15:33