Q3 Crypto Lending Hits $73.6B on Strong On-Chain Growth
Crypto lending reached a record $73.6B in Q3 2025, surpassing its 2021 peak by 6.1%, as on-chain crypto lending volumes jumped 54.8% quarter-over-quarter to $40.99B. DeFi protocols captured 66.9% of total crypto lending and over 80% of on-chain market share, driven by BTC and ETH collateral, farming incentives, and enhanced assets like Pendle Principal Tokens. CeFi lenders held $24.4B in outstanding loans—led by USDT’s 59.9% share—under full collateral, greater transparency, and robust risk controls.
A historic $19B perpetual futures liquidation on October 10 underscored market volatility but stemmed from rapid price drops rather than systemic leverage excess. Collateral now concentrates in low-volatility assets, reducing overall system risk. On-chain borrowing rates for stablecoins, BTC, and ETH remain below off-chain levels, offering traders attractive costs.
Stricter collateral standards, improved transparency, and enhanced risk management underpin greater market stability. For traders, higher on-chain liquidity and healthier risk profiles signal bullish opportunities, while isolated futures liquidations highlight the need for vigilant risk control.
Bullish
Record crypto lending growth and improved risk controls suggest stronger market confidence and liquidity. On-chain lending’s share expansion and lower borrowing rates for BTC and ETH enhance trader access to leverage at attractive costs. While the $19B futures liquidation highlights volatility, it reflects price-driven events rather than systemic overleverage. Overall, healthier collateral standards and transparency support sustained bullish momentum in both short-term trading and long-term market stability.