Tether, Galaxy, and Ledn are the leaders in centralized finance (CeFi) crypto lending. Combined, they will collectively administer an astounding $9.9 billion in loans outstanding by the end of 2024. This measures up to almost 90% of the whole CeFi market. Decentralized finance (DeFi) platforms are quickly becoming one of the most successful use cases. Excluding borrowings of crypto-backed stablecoins, they now represent 63% of all crypto borrowing. This represents a huge change from the last bull run, adding to the growing complexity of crypto lending. The combined crypto lending market has dropped to $36.5 billion. It’s a big 43% decline from its high in late 2021.

CeFi Lending Landscape

Zack Pokorny, a research associate at Galaxy, discloses that Tether, Galaxy, and Ledn control 66% of the CeFi lending market. As shareholders, they collectively own more than 84% of its share.

This incredible concentration of power dramatically contrasts with the structure of the market at the end of 2021 and the beginning of 2022. At the time, Genesis, Celsius, and BlockFi were pioneers in centralized crypto lending. These firms then went on to dominate 76% of the market, although they have later suffered major body blows.

Cantor Fitzgerald, Tether’s main collateral custodian, is here to tell you all about it! They’re doing all this as they eye a $2 billion bitcoin financing rollout this coming July. This most recent move represents increased institutional participation in the crypto lending arena.

DeFi's Ascendant Role

Ethereum still accounts for the vast majority of the DeFi lending market with $33.9 billion worth of assets deposited as of the end of March 2025. Lending remains the biggest use case for DeFi, with protocols like Aave and Compound out in front.

These platforms work on the model of over-collateralization, which means borrowers must deposit significantly more collateral than their loan amount. This mechanism greatly minimizes credit risk, one major factor that led to the collapse of many CeFi lenders.

Galaxy's research indicates that the growing presence of prime brokers offering lending and leverage on DeFi products is further expanding the market's reach and potential. Such institutional interest only emphasizes the growing legitimacy and maturity of the DeFi lending industry, as it continues to gain popularity.

Market Dynamics and Future Outlook

The current rate for borrowing against bitcoin is around 5.5% to 7%.

The rate for borrowing against bitcoin, is now hovering anywhere from 5.5%-7%. That's down from what we've seen over the last few months. It suggests a lot of people are sitting on the sidelines while the tariff wars play out, but the lending market is still in a relatively strong position today. - Sid Powell, CEO and cofounder of Maple Finance

Commentary from Sid Powell, CEO and Founder of Encode Ideas, indicates a jittery market disposition affected by macroeconomic conditions.

I think a lot is riding on whether the 10-year-yield comes under control a bit, and if the Fed will start seeing some inflation reduction and an improvement in employment numbers. Then we’ll see a rate cut, and that will be beneficial for crypto asset prices. - Sid Powell, CEO and cofounder of Maple Finance

Powell’s analysis hedges crypto’s market influence by noting the connectedness of the crypto market with general economic trends and broad monetary policy.

We, among others, are looking at how we can package and tokenize that asset for institutional consumption. - Sid Powell, CEO and cofounder of Maple Finance

Powell’s quote offers a glimpse into the industry’s continuing battle to win institutional investors through development of market-driven products.