The crypto credit market shows signs of life again. Centralized Finance (CEFI) and decentralized financial platforms (Defi) platforms experience a revival, in which the latter leads.
This turnout follows a devastating collapse in which major players such as Celsius, Genesis and Blockfi saw crumble. As a result, investors were faltered and battered trust in the sector.
According to a recent report from Galaxy Digital, the total size of outstanding CEFI loans from Q4 2024 was $ 11.2 billion. This represented an increase in the 73% bear market when it reached $ 6.4 billion.
Cefi Lending Market Performance. Source: Galaxy Digital
Despite this positive growth, the CEFI credit market remains considerably among the previous highlights.
“This is largely due to the lack of recovery at CEFI loans after the 2022 bear market and the decimation of the largest lenders and borrowers on the market,” the report said.
The total market size falls by 68% compared to its peak of $ 34.8 billion. The collapse of large credit platforms is the primary factor behind this sharp decrease, which led to a major loss of trust and a corresponding decrease in loan volumes.
In particular, the recovery in CEFI loans is also characterized by a consolidation of market share. The top three credit-providers-Verstel, Galaxy and LEDN controlled 89% of the market from Q4 2024. The then three lenders then held in 2022, including Genesis, Blockfi and Celsius, 75% of the market share.
Together these players manage Cefi’s recovery, although they are confronted with growing competition from Defi protocols. Galaxy Digital emphasized that Defi -Loingen experienced a much stronger recovery. In the Bull Run from 2020 to 2021, Defi -Leen -Apps formed only 34% of the market. Yet it was 63%against Q4 2024.
“Since 2022, most CEFI companies have not offered yield products to American customers. Defi-platforms often do not adhere to these regulations, nor require KYC, which can be a factor,” Poem founder Mauricio di Bartolomeo of LEDN.
The growth is also demonstrated by the fact that Defi -Lenen has reached a new peak, 18% higher than the previous peak of the Bullmarkt. Defi -Lending Apps such as Aave (Aave) and composite (Comp) survived the Berenmarkt without collapse, and benefited from their decentralized nature and strong risk management. In fact, Defi -Loans rose to 959% from Q4 2022 to Q4 2024.
“Aave and Compound, has seen strong growth of the $ 1.8 billion in open loans. There were $ 19.1 billion in open loans in 20 loan applications and 12 block chains at the end of Q4 2024,” Galaxy noted.
The increase has contributed considerably to the overall improvement of the crypto credit market. Exclusive CDP -Stablecoins saw the Crypto credit market a recovery of 214% from Q4 2022 to Q4 2024.
“The total market has been expanded to $ 30.2 billion, usually powered by the expansion of Defi Lending App,” the report noted.
Cefi and Defi Lending Recovery. Source: Galaxy Digital
While Cefi Lending continues to stabilize under the control of a few major players, Defi platforms have emerged as true leaders in the recovery. Their decentralized and permissionless nature provides a strong basis for growth in a market that still recovers from previous turbulence. Despite challenges, it has gained considerable growth, which emphasizes the resilience of the crypto credit space in the light of adversity.
