Crypto Lending Market Slumps for Third Consecutive Quarter

The crypto-backed lending market has seen its outstanding value decline for the third consecutive quarter, according to Galaxy Research. In the second quarter of 2026 (April-June), the total outstanding value fell by 16.78% quarter-over-quarter to $56.16 billion.

This marks a significant drop from the peak of $78.69 billion in the July-September 2025 quarter, where lending outstanding declined by 10%, 5%, and 17% respectively over the past three quarters.

The decline is characterized as 'descending the stairs one step at a time' by Galaxy Research, indicating that borrowers and lenders are carefully reassessing risk rather than experiencing forced liquidations or counterparty failures.

Centralized finance (CeFi) lending outstanding has surpassed decentralized finance (DeFi) for the first time since July-September 2023, with CeFi at $22.98 billion (approximately ¥3.7 trillion) and DeFi at $20.43 billion (approximately ¥3.3 trillion).