The crypto lending market is now more transparent than at any point in its history—driven by firms such as Tether, Nexo, and Galaxy—and has reached nearly $25 billion in outstanding loans for the third quarter.
According to Galaxy Research, the sector has grown more than 200% since early 2024, pushing it to its highest level since Q1 2022. Even so, the market remains below its previous peak of $37 billion during that period.
Galaxy’s head of research, Alex Thorn, said the key difference between the current landscape and earlier cycles is the emergence of new centralized finance lending platforms alongside significantly improved transparency. Thorn added on Sunday that he was proud of the new data and the openness of contributors, calling it a “big change from prior market cycles.”
Tether and new entrants lead the CeFi lending market
During the last major market cycle, the CeFi lending sector was dominated by a few large platforms—including Genesis, BlockFi, Celsius, and Voyager—all of which were severely affected by their exposure to FTX, which collapsed in November 2022. Celsius had already filed for bankruptcy months earlier, in July 2022, after taking heavy losses tied to Three Arrows Capital.
According to Alex Thorn of Galaxy Research, the departure of many FTX-linked lenders has since opened the door for more transparent players and stronger industry practices.
As of Sept. 30, stablecoin issuer Tether holds $14.6 billion in outstanding loans, representing about 60% of the market. Nexo follows with $2 billion, while Galaxy ranks third with $1.8 billion, Galaxy reported.
Thorn noted that Tether now releases quarterly attestations, while Galaxy and Coinbase disclose data through public financial filings. Nexo also provides information directly to Galaxy Research.
CeFi lenders have become significantly more cautious since the 2022 wave of collapses. Uncollateralized lending has mostly vanished, replaced by tighter risk management, full-collateral requirements, and greater transparency—all moves aligned with pursuing institutional backing and potential public listings.
DeFi lending hits new all-time high
On the decentralized side, dollar-denominated lending on DeFi platforms set a new quarter-end record in Q3, rising 54.8% to reach $41 billion, Galaxy reported last month.
When combining CeFi lenders with DeFi protocols, total outstanding crypto-collateralized loans climbed to $65.4 billion at the end of the quarter—an all-time high.
