Crypto lending down 43% from 2021 highs, DeFi borrowing surges 959%

The crypto lending market, once valued at $64 billion, has shrunk to $36.5 billion, a decline attributed to the bankruptcies of major centralized finance (CeFi) lenders like Celsius and Voyager. This market downturn began in 2022 with a significant collapse in CeFi lending, causing an 82% reduction in open borrows. However, decentralized finance (DeFi) lending has shown remarkable resilience. DeFi borrowing has surged by 959% from its bear market low of $1.8 billion to $19.1 billion. This recovery is attributed to the permissionless nature of DeFi applications, allowing many to survive the market turmoil unlike CeFi firms. The top three CeFi lenders currently control a substantial portion of the remaining CeFi market. Despite the DeFi recovery, the overall crypto lending market remains below its all-time high. The disparity highlights the contrasting fortunes of CeFi and DeFi within the crypto lending landscape. While the overall market is still recovering, DeFi's growth signifies its increasing role in crypto lending.