Galaxy Research, a digital asset investment firm, reported significant shifts in the cryptocurrency lending market's structure by April 2025.

The report outlines a rapid DeFi growth amid decreased CeFi activity, challenging market dynamics.

DeFi Loans Skyrocket to $19.1 Billion

Tether, Galaxy, and Ledn have emerged as the dominant players in centralized finance (CeFi) lending, steering nearly 90% of the market. These entities have filled the void left by the collapse of once-leading institutions such as Celsius, BlockFi, and Genesis. Negative impacts from the 2022-2023 downturn led to these changes, reshaping the lending landscape.

In contrast, decentralized finance (DeFi) protocols have witnessed a dramatic resurgence. The report highlights a 959% increase in DeFi loans, now valued at $19.1 billion. This growth underscores the resilience and adaptability of DeFi systems, attributed to trustless and automated structures. Zack Pokorny, Research Analyst at Galaxy Research, remarked on DeFi’s resilience: "Unlike the largest CeFi lenders that went bankrupt, the largest DeFi applications continued to function, proving the efficiency of permissionless infrastructure."

Market reactions highlight shifting sentiments.

BTC Surges, Regulatory Horizons Could Shift DeFi

Did you know? By the end of 2024, DeFi protocols surpassed CeFi, claiming 63% market share, a stark contrast to their 34% share in 2021.

Bitcoin (BTC) continues leading the digital currency space, valued at $85,919.80 with a market cap of formatNumber(1705652800170, 2). Recent movements show a 1.56% rise within 24 hours and 7.87% over a week. Despite a longer trend dip, BTC holds dominance, reflected in CoinMarketCap data as of April 15, 2025.

Coincu insights suggest that DeFi's growth could prompt significant regulatory adjustments, influencing the sector's future structure. This potential arises as regulators ponder clearer asset custody rules, perhaps encouraging investors. Meeting these conditions might strengthen DeFi's long-term prospects in the financial landscape.