The total crypto lending market has fallen significantly, down 43% from its 2021 peak of $64 billion to $36.5 billion by the end of 2024. This decline is primarily due to the bankruptcy of major centralized finance (CeFi) lenders like Genesis and Celsius, which caused a dramatic reduction in lending activity. CeFi lending has decreased by 82%, with only $11.2 billion remaining compared to previous highs. Conversely, decentralized finance (DeFi) borrowing has seen a remarkable recovery, increasing by 959% from the bear market low of $1.8 billion to $19.1 billion across various lending platforms. This is attributed to the resilience of DeFi applications that continued functioning despite the CeFi collapse. The report by Galaxy Digital notes that while the CeFi market is heavily concentrated, with a significant percentage held by the largest players, the decentralized sector has proven more robust, highlighting a shift in borrowing trends in the crypto landscape.

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