Borrowing activities at Crypto Markets accelerated sharply in the second quarter of 2025, according to new figures from Galaxy Research.
The survey found that loans supported by digital assets across the Defi protocol rose to a record $26.47 billion, up 42.1% from the previous quarter.
That surge led to an increase in the overall balance of cryptographic functionalized loans, including both Defi and Centralized Finance (CEFI) platforms, to $442.5 billion at the end of June.
The $10.12 billion quarterly quarterly increase was one of the biggest jumps since the bull market year of late 2021 to early 2022, with outstanding loans temporarily surpassing $50 billion.
The report linked the recovery to a combination of rising crypto prices and strong demand for leverage.
Traders often use crypto loans to secure cash without selling their holdings. Bitcoin and Ethereum have recently broken all-time highs, making it seem willing to lock up assets to gain liquidity.
Tether controls Sefhi lending
According to a Galaxy survey, as of June 30, CEFI loans were $17.78 billion, an increase of 14.66% from the previous quarter. The sector rose 147.5% compared to the bear market low of $7.18 billion in the fourth quarter of 2023.
Stablecoin Issuer Tether maintains long-term control and controls more than half of the CEFI lending market. The company closed the quarter on a $10.14 billion open loan, converting it to 57.02% stake.
Nexo continued at $1.96 billion, while Galaxy’s lending unit reported $11.1 billion. Together, the top three lenders accounted for 74.26% of the market.
This marks a 12th consecutive sector leadership in 2022, a position that solidified after the collapse of Genesis, Celsius, Silvergate, Brocki, and Voyager.
These obstacles, caused by lower risk management and market disruption, paved the way for Tether’s share to rise from under 20% to nearly 70% by the second half of 2022.
Its advantage is slightly mitigated from these levels, but Galaxy is attributing a shift to multiple factors.
According to the company, rising asset prices creates a reflex cycle of borrowing demand, but the company’s Treasury Department is increasingly changing its CEFI lenders as a source of funding.
Additionally, competition between lending hastily has also been strengthened, encouraging more attractive borrowing rates across the market.
The report suggests that despite Tether being an uncontroversial leader in the sector, these forces can continue to restructure the power of crypto loans.
