Borrowing exercise in crypto markets accelerated sharply within the second quarter of 2025, based on new figures from Galaxy Analysis.
The examine discovered that loans backed by digital property throughout DeFi protocols climbed to a report $26.47 billion, up 42.1% from the earlier quarter.
That surge lifted the general stability of crypto-collateralized loans, together with each DeFi and centralized finance (CeFi) platforms, to $44.25 billion on the finish of June.
The rise of $10.12 billion quarter-over-quarter represents one of many largest jumps for the reason that bull market years of late 2021 and early 2022, when excellent loans briefly topped $50 billion.
The report linked the restoration to a mixture of rising crypto costs and stronger demand for leverage.
Merchants usually use crypto lending to safe money with out promoting their holdings, and with Bitcoin and Ethereum not too long ago breaking previous earlier all-time highs, extra contributors seem keen to lock up property to seize liquidity.
Tether dominates CeFi lending
Galaxy Analysis reported that as of June 30, open CeFi loans stood at $17.78 billion, marking a 14.66% improve from the prior quarter. In contrast with the bear-market low of $7.18 billion in This fall 2023, the sector has grown 147.5%.
Stablecoin issuer Tether maintained its long-running dominance, controlling greater than half of the CeFi lending market. The corporate closed the quarter with $10.14 billion in open loans, translating right into a 57.02% share.
Nexo adopted with $1.96 billion, whereas Galaxy’s lending unit reported $1.11 billion. Collectively, the highest three lenders accounted for 74.26% of the market.
This marks Tether’s twelfth consecutive quarter of sector management, a place it solidified after the collapse of Genesis, Celsius, Silvergate, BlockFi, and Voyager in 2022.
These failures, triggered by poor threat administration and market turmoil, paved the way in which for Tether’s share to climb from underneath 20% in mid-2021 to just about 70% by late 2022.
Whereas its dominance has eased barely from these ranges, Galaxy attributed the shift to a number of elements.
In line with the agency, rising asset costs have created a reflexive cycle in borrowing demand, whereas company treasuries are more and more turning to CeFi lenders as a funding supply.
Furthermore, the competitors amongst lenders has additionally intensified, driving extra enticing borrowing charges throughout the market.
The report means that these forces might proceed reshaping the stability of energy in crypto lending, at the same time as Tether stays the undisputed chief within the sector.