COINOTAG News reported on April 15th, as Galaxy Research, a prominent player in digital asset investments, unveiled findings indicating that the cryptocurrency lending market remains substantially lower than pre-2022-2023 crypto winter levels. Interestingly, signs of recovery are becoming apparent, particularly within the decentralized finance (DeFi) sector. The projection for the cryptocurrency lending market suggests it could reach $36.5 billion by the end of 2024, a sharp decline from its peak of $64.4 billion during the frenzied 2021 bull run.
The decline can be attributed to the downfall of significant lending entities such as Celsius, BlockFi, and Genesis, which once dominated the centralized finance (CeFi) arena. Currently, Tether leads the market share, closely followed by Galaxy and Ledn, with these three firms representing approximately 90% of the $11.2 billion CeFi loan book, a noticeable decrease of 68% from the early 2022 peak of $34.8 billion.
Conversely, the on-chain ecosystem is witnessing meaningful growth. Decentralized lending protocols empower users to secure cryptocurrency loans by locking collateral, functioning incessantly without the need for centralized oversight. Following the market’s nadir at the end of 2022, outstanding DeFi loans surged an impressive 959%, increasing from $1.8 billion to $19.1 billion across 20 applications and 12 distinct blockchains.