Crypto Lending Seen Contracting -- Market Talk

1421 ET - On-blockchain lending done through either a CeFi platform like Coinbase or Tether or DeFi providers like Compound, Aave, and Morpho continues to lose steam in 2026, according to a note from Galaxy Research. Combined, crypto-collateralized lending in 2Q 2026 fell by nearly 17% from the prior quarter, totaling $56.2 billion, the firm says. The dollar-denominated value of loans held by DeFi lenders plummeted nearly 28%, to $20.4 billion. While the decreases are large, Galaxy characterizes them as a "steady, stepwise decline," as opposed to a complete collapse of lending volume. "This measured pace points to a much healthier deleveraging cycle, driven by gradual risk reduction rather than forced liquidations or counterparty failures," Galaxy says. (kirk.maltais@wsj.com)

(END) Dow Jones Newswires

August 19, 2026 14:21 ET (18:21 GMT)