Tether Dominates Centralized Finance Lending in Crypto Market

Tether is the largest CeFi lender in crypto, followed by Galaxy Digital and Ledn. Their combined loan book totals $9.9 billion, representing 89% of the CeFi market. CeFi lending declined significantly from its peak, while DeFi lending surged, increasing by 959%. The sustainable operations of DeFi platforms through market volatility highlight their design and risk management advantages.

New analysis identifies Tether as the predominant centralized finance (CeFi) lender within the cryptocurrency ecosystem. Zack Pokorny, a research analyst at Galaxy Digital, highlights Tether, alongside Galaxy and Ledn, as significant players, with a collective loan book valued at $9.9 billion by the end of Q4 2024. These entities dominate 89% of the CeFi lending market and account for 27% of total crypto lending. Coinbase ranks as the fourth-largest lender.

According to Alex Thorn, head of research at Galaxy, the total CeFi loan book stood at $11.2 billion at the end of 2024. This figure marks a substantial 68% decline from the previous year’s all-time high of $34.8 billion. In contrast, the decentralized finance (DeFi) sector shows a more robust growth, with $19.1 billion in open borrows across 20 lending applications across 12 different chains.

Pokorny attributes DeFi’s notable recovery, quantified as a 959% increase from its lowest point two years earlier, to the permissionless characteristics of blockchain applications. Unlike CeFi lenders that faced bankruptcy, many DeFi lending platforms maintained their operations during market downturns. This ongoing functionality underscores the resilience and effective risk management of major on-chain lending applications, which feature algorithmic, overcollateralised lending practices adapted to fluctuating supply and demand levels.