The digital financial landscape shows strong signs of recovery, as the centralized crypto lending market reached $25 billion dollars during the third quarter. Alex Thorn, Galaxy’s head of research, highlighted that this volume represents the highest level recorded in over three years, evidencing a structural shift toward safer practices. Likewise, this 200% growth since the beginning of 2024 underscores the renewed confidence of institutional investors in platforms that prioritize operational clarity.
Data reveals a transformation in sector leadership, where Tether positions itself as the dominant player with $14.6 billion in active loans. This grants it a 60% market share, displacing former competitors that operated with more opaque models. On the other hand, entities like Nexo and Galaxy complete the podium, managing credit portfolios of $2 billion and $1.8 billion dollars respectively, basing their success on the proactive publication of financial reports and auditable quarterly attestations.
Will institutional transparency be able to prevent the catastrophic errors of the past cycle?
Previously, the environment was controlled by firms like Genesis, BlockFi, and Celsius, whose exposure to the FTX collapse caused massive losses and chain bankruptcies. The fundamental difference today lies in the near-total elimination of uncollateralized lending, a risky mechanism that prevailed in 2022. Instead, surviving firms have adopted much stricter risk controls and full collateralization standards to attract institutional capital and pursue legitimate public listings.
However, the boom is not exclusive to centralized entities, as decentralized finance (Defi) also marked an impressive historical record. The value of loans in these applications grew by 54.8%, reaching $41 billion dollars at the close of the quarter, demonstrating a healthy diversification of leverage. Combining both sectors, the global ecosystem records more than $65.4 billion dollars in outstanding collateralized borrows, establishing a new all-time high that reflects market maturity.
Finally, this rebirth of digital credit suggests that the industry has learned from its mistakes, building stronger foundations for the future. This trend toward transparency is expected to continue, attracting more traditional players to the crypto financial ecosystem and consolidating long-term stability. Regulatory oversight and corporate self-regulation will be determinant in maintaining this momentum while exploring new highs of liquidity and global adoption in the coming economic cycles.
