Last Week in Crypto: Lending Market Declines, Trump Ventures into Web3 Gaming

The crypto lending market has declined by 43% since its peak, largely due to major lender bankruptcies. Meanwhile, Donald Trump is releasing a crypto game amidst a shrinking Web3 gaming market. Ethereum is down 48% in a year, primarily due to high transaction fees, leading to a significant shift in user preferences towards more affordable blockchain solutions. This trend indicates a reduced value placed on legacy status, highlighting the need for affordability in the cryptocurrency sphere.

Last week, Galaxy Digital reported a 43% decline in the crypto lending market since its peak in Q4 2021. Centralised and decentralised lending practices have been heavily affected, largely due to the bankruptcies of major lenders such as Genesis and Celsius. The crypto lending market stood at $36.5 billion in Q4 2024, down from an all-time high of $64.4 billion. Despite signs of recovery, renewed trust in these lending platforms poses a significant challenge, particularly for new investors with memories of prior mismanaged risks.

In addition to the lending market struggles, reports suggest Donald Trump is set to launch a crypto game, reminiscent of Monopoly, led by Bill Zanker. However, this venture emerges in a contracting Web3 gaming market, with investments plummeting 71% to $91 million in Q1 2025 compared to the previous quarter. With a recent failed crypto venture involving the $TRUMP memecoin, this ambitious project may face uphill challenges in gaining user interest.

Meanwhile, Ethereum has dropped 48% over the past year, standing out from other cryptocurrencies that have shown some resilience. High transaction fees continue to plague Ethereum despite network improvements, making it less appealing compared to cheaper competing chains. For users in emerging economies or those seeking lower-cost blockchain solutions, Ethereum’s prohibitive costs risk alienating its user base.

This situation underlines a wider market trend showing decreasing importance of legacy status, as users now prioritise affordability and functionality over brand recognition. With competitors offering lower fees, Ethereum’s market price reflects investor discontent, urging developers and users to seek opportunities elsewhere, thus contributing to its waning relevance in the blockchain landscape.