Why did crypto loans fall in Q2?

Crypto-collateralised loans fell 16.78% to $56.16 billion as borrowing demand declined, according to Galaxy Research.

How much did crypto lending decline?

Crypto lending fell by $11.33 billion in Q2, reaching $56.16 billion, which was 40.13% below its peak.

DeFi lending had $21.94 billion in outstanding loans in July, down from $47.13 billion in April.

Aave (CRYPTO:AAVE) held $11.2 billion of $23.6 billion in active DeFi loans, representing 47.7% of the total.

Aave (CRYPTO:AAVE) monthly lending reached $10.3 billion, but the increase alone does not confirm broader lending demand.

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Written by Heidi Cuthbert Published Aug 18, 2026, 3:48 AM

Crypto-collateralised loans fell 16.78% in the second quarter to $56.16 billion.
The decline suggests borrowers are reducing leverage, while stablecoin activity remains high.
Aave still holds 47.7% of active DeFi loans, showing demand remains concentrated.

Crypto-collateralised loans fell 16.78% in Q2 to $56.16 billion, according to Galaxy Research.

The total fell $11.33 billion from the previous quarter and sits 40.13% below its peak.

DeFi lending also declined, with outstanding loans falling from $47.13 billion in April to $21.94 billion in July.

Stablecoin activity remained high despite the lending decline, with adjusted transfers estimated at $41.7 trillion in 2026.

USD Coin (CRYPTO:USDC) led activity, while flash loans made up about 65% of USDC volume on Ethereum (CRYPTO:ETH).

Active DeFi loans stood at $23.6 billion, with Aave (CRYPTO:AAVE) accounting for $11.2 billion, or 47.7%.

Average monthly lending through Aave reached $10.3 billion, but the data does not confirm a broader lending recovery.

At the time of reporting, Ethereum price was $1,885.99.

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