Galaxy reports $11B decline in crypto-collateralized lending in Q2 2026

The crypto lending market shed another $11.33 billion in the second quarter of 2026, bringing total outstanding crypto-collateralized loans down to $56.16 billion. That’s a 16.78% quarter-over-quarter decline and, perhaps more telling, a 40.13% drop from the market’s peak of $78.69 billion recorded in Q3 2025. Galaxy Research, the analytical arm of Galaxy Digital, published the findings in its Q2 2026 report. The takeaway: borrowers are pulling back from leverage in a measured, voluntary fashion. This isn’t a 2022-style panic. DeFi takes the bigger hit The contraction wasn’t evenly distributed. Decentralized finance lending fell 27.61%, landing at $20.43 billion. Centralized finance held up better, declining just 9.62% to $22.98 billion. That gap produced a notable milestone. CeFi’s share of the lending market now exceeds DeFi’s for the first time since Q3 2023. The crypto-collateralized portion of CDP stablecoin supplies also decreased by 7.86%, completing a clean sweep. Galaxy’s report noted this marks the first quarter since Q4 2022 where lending declined across all three categories: CeFi, DeFi, and CDP stablecoin collateral. An orderly retreat, not a rout Galaxy Research was ca...