Crypto Lending Market Overview

The crypto lending sector has reached unprecedented heights, boasting a total loan volume of nearly $25 billion in the third quarter, according to Galaxy Research. This represents a substantial rise of over 200% since the start of 2024, marking the highest level since early 2022.

Despite this notable growth, the sector is still shy of its record peak of $37 billion. Notably, the enhancement in transparency in operations has been a game changer, credited to prominent players such as Tether, Nexo, and Galaxy. Alex Thorn, Galaxy’s research head, emphasized the industry’s evolution, noting significant improvements in transparency compared to previous cycles.

Tether and Emerging Players in CeFi Lending

The centralized finance (CeFi) market in crypto lending has witnessed a shift, now led by players who prioritize transparency. In the past, the market was significantly influenced by firms like Genesis, BlockFi, Celsius, and Voyager, many of which were adversely affected by the FTX collapse in 2022.

As of September 30, 2023, Tether represents a 60% market share with $14.6 billion in active loans. Thorn lauded the current transparent practices, mentioning that post-FTX, the market has notably improved.

All-Time Highs in DeFi Lending

On the decentralized finance (DeFi) front, reports indicate a new all-time high in dollar-denominated loans valued at $41 billion, reflecting a growth of 54.8% over the quarter. Combined with CeFi lending avenues, the total outstanding loans reached $65.4 billion, signifying a landmark achievement in crypto-collateralized borrowing.