Tether, Galaxy and Ledn Take Lead as Crypto Lending Market Rebounds

Tether, Galaxy and Ledn have become leaders in a crypto lending market that has rebounded since its collapse two years ago.

As of the end of the fourth quarter of 2024, the three firms accounted for 88.6% of the centralized finance (CeFi) lending market and 27% of the total crypto lending market, which includes crypto-backed collateral debt position (CDP) stablecoins, Galaxy said in a report posted Monday (April 14).

The crypto lending market was gauged at $36.5 billion at the end of the fourth quarter, a figure that was down 43% from the all-time high of $64.4 billion in the fourth quarter of 2021 but up 157% from its low in the third quarter of 2023, according to the report.

The total size of outstanding CeFi borrows stood at $11.2 billion at the end of the fourth quarter, down 68% from the all-time high of $34.8 billion seen in the first quarter of 2022 but up 73% from the trough of $6.4 billionrecorded in the third quarter of 2023.

CeFi includes centralized off-chain financial companies that offer lending and borrowing services for cryptocurrencies and crypto related assets, the report said.

Some of the largest CeFi lenders at the time filed for bankruptcy during the collapse of crypto prices and the loss of liquidity in the market in 2022 and 2023, per the report.

“DeFi borrowing has experienced a stronger recovery than that of CeFi lending,” the report said. “This can be attributed to the permissionless nature of blockchain-based applications and the survival of lending applications through the bear market chaos that felled major CeFi lenders. Unlike the largest CeFi lenders that went bankrupt and no longer operate, the largest lending applications and markets were not all forced to close and continued to function.”

It was reported in March that Tether was talking with one of the Big Four accounting firms about doing an audit of its reserves, though the company did not specify which accounting firm it is talking with or when the audit would be conducted.

In January, it was reported that Tether made $13 billion in profits in 2024 due in part to the growing adoption of stablecoins.