Crypto Loans Surpass $73B in Q3 2025, Driven by DeFi Dominance

The crypto loan market has reached a record $73.6B in Q3 2025, driven by decentralized finance (DeFi) protocols.

Crypto loans work like a pawnshop, but for digital assets: borrowers deposit collateral and receive a loan in stablecoins or fiat currencies without selling their assets.

Overcollateralization is standard, with lenders requiring more value to be locked up than the amount borrowed. This is due to volatility, as crypto prices can drop 20-30% in a single day.

The market split between centralized finance (CeFi) and DeFi platforms. CeFi operates like fintech companies, while DeFi protocols use smart contracts to issue loans automatically.