Encryption Lending Market Report: Scale Reaches $36.5 Billion, Significant Rise in the DeFi Sector

Recently, a report on the current state of the cryptocurrency lending market has attracted widespread attention within the industry. The report shows that by the fourth quarter of 2024, the total size of the crypto lending market reached 36.5 billion US dollars, with a particularly noticeable rise in the Decentralized Finance ( DeFi ) sector.

The report points out that the encryption lending market is mainly divided into two categories: centralized finance ( CeFi ) and decentralized finance ( DeFi ). CeFi lending includes over-the-counter ( OTC ), prime brokerage, and on-chain private credit, while DeFi lending includes lending applications, collateralized debt positions ( CDP ) stablecoins, and decentralized exchanges.

Data shows that the main components of the current market size are:

• Decentralized Finance lending: $19.1 billion
• CeFi lending: $11.2 billion
• CDP stablecoin: $6.2 billion

It is worth noting that since the market low in the fourth quarter of 2022, DeFi lending applications have experienced a strong rise. Over eight quarters, DeFi lending increased by 959%, from $1.8 billion to $19.1 billion. This growth is primarily attributed to the resilience of DeFi platforms during the bear market, as well as the advantages of their permissionless nature and risk management practices.

In contrast, the recovery of the CeFi lending market has been relatively slow. Although it has risen from $6.4 billion at the bear market low to $11.2 billion, it is still far below the historical peak of $34.8 billion. Currently, the top three CeFi lending institutions account for 88.6% of the market.

The report also pointed out that the landscape of the encryption lending market is changing. The market share of DeFi lending applications has risen from 34% during the bull market of 2020-2021 to the current 63%. When including CDP stablecoins, DeFi and CDP stablecoins together account for 69% of the entire market.

Looking ahead, the report predicts that the encryption lending market will show the following trends:

1. Institutionalization of CeFi lending: Traditional financial institutions may enter the market, and Bitcoin ETFs may drive the rise of leveraged trading.

2. The rise of on-chain private lending: tokenized debt instruments may bring higher transparency and lower management costs.

3. The institutionalization and innovation of Decentralized Finance: Institutions may accelerate the adoption of Decentralized Finance, centralized companies may build new products based on DeFi protocols.

Overall, the encryption lending market is experiencing differentiation, with Decentralized Finance showing strong resilience, while Centralized Finance faces both opportunities and challenges. In the future, with the advancement of tokenization, automated risk control, and institutional participation, encryption lending is expected to become a core component of digital financial infrastructure.