According to the Galaxy Research Q2 2026 report, the total volume of outstanding crypto-collateralized loans reached $56.16 billion. This figure represents a 40.13% decrease from the peak of $78.69 billion recorded in Q3 2025. The decline in the second quarter of 2026 amounted to $11.33 billion, marking a 16.78% drop compared to the previous quarter.
This period marks the third consecutive quarter of declining lending volumes, with previous drops of approximately 10%, 5%, and 17%. Despite the contraction, Galaxy Research describes the current market environment as orderly, noting that lending markets remained stable through September 2026. This contrasts with the 2022 market collapse, which saw a 55% reduction in loans in a single quarter.
The contraction affected sectors differently: DeFi lending volume fell by 27.61% to $20.43 billion, while CeFi lending decreased by 9.62% to $22.98 billion. This shift marks the first time since Q3 2023 that CeFi volumes have surpassed DeFi. Notably, companies including Galaxy, Coinbase, and Ledn reported growth in their loan volumes despite the overall market trend.
The report highlights that the current reduction in leverage is driven by borrowers voluntarily paying down positions rather than forced liquidations. As older forms of leverage are unwound, the market is seeing the emergence of new, more diversified on-chain credit products. Analysts suggest that this gradual restructuring indicates a maturation of the crypto lending sector.
