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The size of the cryptography loan market remains considerably decreasing compared to its top of $ 64 billion, but the decentralized finance (DEFI) borrowed more than 900% of the bottom of the bear market.
Cryptographic loans allow borrowers to use their cryptographic participation as a guarantee to obtain a cryptographic or Fiat loan, while lenders can lend their assets to generate interests.
The cryptography loan market is down more than 43%, against its summit of $ 64.4 billion in 2021 to 36.5 billion dollars at the end of the fourth quarter of 2024, according to a Galaxy digital research report published on April 14.
“The decline can be attributed to the decimation of lenders on the side of supply and funds, individuals and corporate entities on the side of demand,” according to Zack Pokorny, research partner at Galaxy Digital.
Crypto lend key events. Source: Galaxy Research
The drop in the cryptography loan market began in 2022 when centralized financing lenders (CEFI) Genesis, Celsius Network, Blockfi and Voyager have filed a bankruptcy in two years as cryptographic assessments have dropped.
Their collective fall resulted in an collapse estimated at 78% of the size of the loan market, the CEFI Lending losing 82% of its open emprans, according to the report.
While the overall value of the cryptography loan market has not yet reached its previous heights, DEFI Lending has made significant recovery according to certain measures.
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The cryptography loans has found its substance at $ 1.8 billion in locations open to the bears market in the fourth quarter of 2022.
However, Open DEFI borrowers reached $ 19.1 billion on 20 loan requests and 12 blockchains by the end of 2024, which represents an increase of 959% compared to eight quarters compared to the bottom of the 2022 market.
“Defi borrowing has experienced stronger recovery than that of CFI loans,” wrote Pokorny, Galaxy Digital Research Associate:
“This can be attributed to nature without authorization of applications based on blockchain and to the survival of loan applications thanks to the chaos of the bear market which has shot down the main CEFI lenders.”
“Unlike the greatest CEFI lents who have gone bankrupt and which no longer work, the largest loan applications and the markets were not all forced to close and continued to operate,” he added.
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The CEFI Empiets in progress are worth a collective of $ 11.2 billion, which is 68% lower than that of the peak of $ 34.8 billion in book size of CEFI lenders obtained in 2022.
Size of the CEFI loans market at the end of the quarter. Source: Galaxy Research
The three largest lenders CEFI, Tether, Galaxy and LEDN, represent 88.6% of the Total CEFI loans and 27% of the total cryptography loans.
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post url: https://altcoin.observer/crypto-lending-low-43-from-2021-highs-defi-borrowing-increases-959/