Bitstamp Monthly Briefing – April 2025
April brought a rebound in the crypto market. Bitcoin dominance continued to rise, while lending, both CeFi and DeFi, took center stage in the industry narrative. From sharp rallies to deep pullbacks, here’s a snapshot of what moved the markets and what to watch in May.
Market update
The total crypto market cap increased by 10.3% month-over-month, hitting $2.90 trillion at April’s end. Trading volume on the leading crypto spot exchanges we monitor saw a 14% decrease during this period.
BTC's market dominance increased by 2.20 percentage points month-over-month to 64.5%.
Total crypto market cap (grey) and BTC dominance (green)
Biggest movers in April
- +174.5% Fartcoin (FARTCOIN) – Continued its strong rally, reclaiming the $1B market cap milestone.
- +166.0% Virtuals Protocol (VIRTUAL) – Price surged on growing AI agent activity and a wave of positive social sentiment.
- +109.5% Solayer (LAYER) – Hit a new all-time high, driven by excitement surrounding its upcoming Devnet and mainnet launches.
- -31.7% AB (AB) – Pulled back after a strong three-month rally, marking its first major dip this year.
- -26.0% DeXe (DEXE) – Extended its decline from February, logging a third straight month in the red.
- -23.1% Toncoin (TON) – Pulled back sharply after a strong March rally, wiping out all gains from the previous month.
Past performance is not a reliable indicator of future results. The performance of crypto assets can be highly volatile. Data taken on May 1, 2025.
Key macro & crypto events in May 2025
- May 6-7: Governing Council of the ECB: Annual retreat hosted by Banco de Portugal
- May 7: FED Interest Rate Decision and Press Conference
- May 9: ETHLisbon in Lisbon, Portugal
- May 11-18: Canada Crypto Week in Toronto, ON, Canada
- May 13: US Inflation & Core Inflation rate
- May 13-14: ETHWomen in Toronto, ON, Canada
- May 17-18: Bitcoin Pizza Day Prague in Prague, Czech Republic
- May 19-25: Dutch Blockchain Week in Amsterdam, Netherlands
- May 20-22: Avalanche Summit IV London in England Hatfield House, UK
- May 23: ETHDublin in Dublin, Ireland
- May 23-24: ETHBratislava in Bratislava, Slovakia
- May 24: Bitcoin Ireland Conference in Dublin, Ireland
- May 27: ETHPrague in Prague, Czech Republic
- May 27-29: Bitcoin 2025 Las Vegas in Las Vegas, NV, USA
- May 29-30: Litecoin Summit Las Vegas in Las Vegas, NV, USA
The crypto lending landscape
Crypto lending and borrowing have emerged as foundational pillars of the digital asset ecosystem, offering users innovative ways to unlock liquidity, earn yield, and access capital. As Galaxy Research writes, these use cases have found a strong product–market fit both on-chain and off-chain, with the market peaking at over $64 billion in size. In 2025, the landscape is more dynamic than ever, shaped by a growing interplay between centralized finance (CeFi) providers and decentralized finance (DeFi) platforms. Lending has not only enabled broader financial access but also helped build a robust infrastructure for digital assets, allowing users to leverage their holdings across trading venues and DeFi protocols.
After peaking in 2021 and experiencing a significant contraction during the subsequent bear market, the crypto lending market is regaining momentum. As of late 2024:
- Total Market Size: Approximately $36.5 billion, down from the $64.4 billion high in 2021, but showing a strong recovery.
- DeFi Lending: Now accounts for about 63% of total crypto borrows, with open borrows surging over 900% since the 2022 low.
- CeFi Lending: Still significant, with major players like Tether, Galaxy, and Ledn holding $9.9 billion in loans.
Centralized crypto lending (CeFi): Traditional meets crypto
Centralized providers operate much like traditional banks, but with a crypto twist. They offer lending and borrowing services to both institutional and retail clients, often with more predictable rates and regulatory oversight.
CeFi lending encompasses several distinct models. Over the counter (OTC) lending involves custom, bilateral loan agreements primarily between institutions, miners, and high-net-worth individuals, with collateral typically secured in multisig wallets. On the retail side, platforms like Ledn and Unchained provide crypto-backed loans to individuals and small businesses for purposes such as home purchases or business expansion. Meanwhile, traditional financial institutions and prime lenders are increasingly entering the crypto lending space, attracted by clearer regulatory frameworks and new products like Bitcoin exchange-traded products (ETPs).
CeFi advantages
- Predictable loan terms and rates
- Discretion and tailored risk management
- Access to established banking infrastructure
CeFi challenges
- Counterparty and regulatory risks
- Less transparency compared to DeFi
Decentralized crypto lending (DeFi): Open finance for all
DeFi lending platforms are built on blockchains and governed by smart contracts, enabling anyone to lend or borrow without intermediaries. This sector has exploded in recent years, both in innovation and adoption.
DeFi lending operates on a permissionless basis, meaning users can access services without credit checks or KYC, simply by connecting their wallet. Smart contracts handle the entire process, automating lending, borrowing, and liquidations to ensure transparency and operational efficiency. To mitigate risk, loans are typically over-collateralized, requiring borrowers to deposit assets worth more than the loan amount.
Leading DeFi platforms
- Aave: Multi-chain, flexible rates, and a wide range of supported assets.
- Compound: Peer-to-peer lending on Ethereum.
- MakerDAO: Pioneering collateralized stablecoin lending.
- Solend, Notional, Maple Finance: Each brings unique features like fixed rates, institutional pools, and multi-chain support.
DeFi advantages
- Transparent, automated, and open to all
- Higher yields due to lower overhead
- Composability with other DeFi services
DeFi challenges
- Smart contract vulnerabilities
- Over-collateralization can limit capital efficiency
- Market volatility affecting collateral
Trends and the road ahead
The line between CeFi and DeFi is blurring. Hybrid models are emerging, with centralized firms tapping into DeFi liquidity pools and vice versa. Institutional adoption is accelerating, especially as regulatory clarity improves and new products make crypto lending more accessible and secure.
DeFi lending and crypto-backed stablecoins have grown to represent 69% of the total crypto lending market, reflecting a strong shift toward decentralized finance. Innovation in the space continues to accelerate, with emerging trends like tokenized private credit, managed vaults, and cross-chain lending expanding the ecosystem’s capabilities. At the same time, institutional participation is rising—not only within CeFi, where banks and funds are becoming more active, but also in DeFi, as these players begin to explore integrations with decentralized protocols to enhance efficiency and access new markets.
The crypto lending and borrowing landscape in 2025 is robust, innovative, and increasingly interconnected. CeFi offers the comfort of tradition and regulatory clarity, while DeFi delivers transparency, accessibility, and rapid innovation. As both sectors continue to evolve, and often overlap, users and institutions alike have more options than ever to put their crypto to work.
Recommended reads
The Tribalism of Blockchains
by BOFFIN
BOFFIN describes the current state of crypto as a chaotic, tribal battleground where Layer 1 blockchains like Ethereum, Solana, and Bitcoin act as rival tribes—each with a distinct culture, tech focus, and loyal community—all fighting for developer mindshare, user adoption, and capital. Layer 2s amplify their parent L1’s vision, scaling usability while preserving the core ethos, turning abstract ideals into practical tools. Platforms like Twitter and Discord fuel cult-like dynamics, enabling tight feedback loops between devs and users. While this tribalism drives innovation, it also breeds toxic rivalry, slows collaboration, and blinds the community to external threats like regulation. Still, the friction is part of the fuel—propelling crypto’s messy, relentless evolution.
Stablecoins: Payment Without Intermediaries
Despite the internet revolutionizing global communication and information sharing, moving money remains slow, expensive, and riddled with middlemen. Stablecoins—cryptocurrencies pegged to stable assets like the U.S. dollar—offer a transformative alternative by enabling fast, low-cost, borderless transactions on open blockchain networks. Already used by companies like SpaceX and Stripe, stablecoins are slashing remittance fees, streamlining global commerce, and creating programmable, transparent financial infrastructure. Much like how WhatsApp revolutionized messaging, stablecoins could be the “internet moment” for money. With smart regulation on the horizon, stablecoins are poised to become the foundation of a new, more inclusive global financial system.
The 2025 State of Airdrops Report and How the U.S. got Sidelined
by Jess Furr from Dragonfly Research
Airdrops have been a powerful growth tool in crypto, distributing billions in tokens and driving user engagement globally, but U.S. users have largely been excluded due to regulatory uncertainty, costing them an estimated $3.5–$5 billion in missed value and over $1 billion in lost tax revenue. As global projects adapt by shifting operations offshore and restructuring airdrop mechanics, the U.S. risks falling behind in crypto innovation. However, with evolving policy discussions and new legal frameworks emerging, there’s hope for a compliant path forward that could re-open airdrop opportunities for American users and businesses.
The Case for Learning by Doing in Investing
Investing is best learned through a mix of education and experience, blending Oscar Wilde’s idea that true knowledge must be lived with Warren Buffett’s advice to learn from others’ mistakes. While experience can be costly, a foundation in key educational areas—market history, investor psychology, statistics, and the value of simplicity—can prepare individuals for the unpredictable nature of markets. Classic works by Bernstein, Graham, Taleb, and others highlight enduring lessons like the madness of crowds, the illusion of consistent outperformance, and the pitfalls of complexity. Still, hands-on exploration—like buying a favorite stock or dabbling in crypto with small amounts—offers irreplaceable insight, much like Einstein learning to sail by repeatedly running aground.
No information in this blog is intended to provide any personal investment services or advice nor is it an investment recommendation. Clients are responsible for making their own investment decisions. Bitstamp accepts no responsibility for any damage and/or loss arising from the use of information provided herein. Past performance is not necessarily an indicator of future results. Please consider your individual position and financial goals before making an independent investment decision.
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