Crypto Lending Market Plummets 40% from Peak: A Rollercoaster Ride Through Q4 2024

From $64.4 Billion to $36.5 Billion: The Stunning Decline

Hang onto your hats, folks! The crypto lending market took a wild plunge, crashing down to a mere $36.5 billion by the end of Q4 2024. That's a jaw-dropping 40% drop from its all-time high of $64.4 billion back in late 2021. Galaxy Digital's analysts spilled the beans on April 14, pointing fingers at the "decimation of lenders on the supply side, and funds, individuals, and corporate entities on the demand side." Ouch!

CeFi Lenders Crushed in the 2022-2023 Downturn

Hold tight, because the centralized finance (CeFi) lenders got absolutely hammered during the 2022-2023 downturn. Galaxy Digital's report didn't hold back, saying that some of the biggest CeFi lenders "crumbled in 2022 and 2023" as crypto prices tanked and "liquidity in the market dried up." It's like watching a slow-motion train wreck! Genesis, Celsius Network, BlockFi, and Voyager all threw in the towel and filed for bankruptcy. Talk about a rough ride!

CeFi Lending Tanks 82%: From $34.8 Billion to $6.4 Billion

Get this: CeFi lending hit a high of $34.8 billion, but then a tsunami of bankruptcies came crashing down, dragging the market down a staggering 82% to just $6.4 billion. The numbers don't lie! The top three CeFi lenders - Tether, Galaxy, and Ledn - were left holding a combined loan book of $9.9 billion, which is a whopping 88.6% of the CeFi market. Compare that to Q1 2022, when Genesis, BlockFi, and Celsius were the big dogs, making up 76% of the market. It's a whole new ball game!

DeFi Lending Soars 959%: From $1.8 Billion to $19.1 Billion

But wait, there's a glimmer of hope! Decentralized finance (DeFi) lending is staging a comeback, and it's not messing around. Open borrows across 20 lending apps and 12 blockchains skyrocketed to $19.1 billion by Q4 2024. That's a mind-blowing 959% increase from the rock-bottom low of $1.8 billion in Q4 2022. Galaxy Digital called it a "testament to the design and risk management practices of the large onchain lending apps." It's like watching a phoenix rise from the ashes!