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Monday Dec 1 2025 05:10
2 min
The crypto lending market is undergoing a notable transformation, characterized by increased transparency and growth. According to data from Galaxy Research, the aggregate loan book outstanding reached nearly $25 billion in the third quarter of this year. This represents an increase of over 200% since the beginning of 2024, placing the market at its highest levels since Q1 2022.
Despite this growth, the market has yet to return to its peak of $37 billion previously recorded. However, the key difference between then and now lies in the emergence of numerous new centralized finance (CeFi) lending platforms and a significant increase in transparency, according to Galaxy's head of research, Alex Thorn.
During the previous market cycle peak, the CeFi lending landscape was dominated by a handful of platforms, including Genesis, BlockFi, Celsius, and Voyager. These platforms were significantly impacted by their exposure to the FTX exchange, which collapsed in November 2022. Celsius had already filed for bankruptcy in July 2022 prior to the FTX collapse, primarily due to exposure to Three Arrows Capital.
However, Thorn argues that following the exit of many FTX-linked platforms, the vacuum has been filled by more transparent players and healthier practices. Stablecoin issuer Tether holds $14.6 billion of open loans, or a 60% market share, as of September 30. Nexo and Galaxy followed in second and third place, respectively, with $2 billion and $1.8 billion in loans, according to Galaxy. Tether publishes quarterly attestations, while Galaxy and Coinbase data are presented in the form of public financial reports. Nexo proactively provides data to Galaxy Research, said Thorn.
CeFi lenders have become more conservative in the wake of the 2022 collapses. Uncollateralized lending has largely disappeared as surviving firms adopted stricter risk controls, full collateralization standards, and greater transparency to pursue public listings and institutional capital.
Meanwhile, the dollar-denominated value of outstanding loans on decentralized finance (DeFi) applications reached another new quarter-end all-time high in Q3, growing by 54.8% to $41 billion, according to Galaxy last month.
Combining DeFi apps with CeFi lending venues, there were $65.4 billion of outstanding crypto-collateralized borrows at quarter-end, a new all-time high, it noted.
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