Crypto-Backed Lending Falls 17% Amid CeFi Surge

The crypto-backed lending market shrunk to $56.16 billion in Q2, down 17% from the previous quarter, according to data from Galaxy Research.

This marks a continued deleveraging trend, with the figure now 40.13% below the $78.69 billion peak recorded in the third quarter of 2025.

Centralized finance (CeFi) lending pushed ahead of decentralized finance (DeFi) for the first time since Q3 2023, growing by a moderate 9.62% to $22.98 billion, while DeFi lending contracted by 27.61% to $20.43 billion.

The decline in lending volumes signals reduced leverage in the crypto ecosystem, which may lower systemic risk but also dampen liquidity.