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Crypto borrowing volumes are diverging sharply between decentralized and centralized platforms as market stress forces traders to choose between cutting leverage or preserving capital, according to new CryptoQuant data.
While DeFi borrowing on Aave collapsed 69% from $6.2 billion to $1.9 billion since August, centralized lender Nexo just recorded a 155% weekly surge in credit withdrawals as investors tap crypto-backed loans rather than liquidate holdings at depressed prices.
Crypto Borrowing activity across DeFi protocols has dropped sharply in recent months, tracking closely with declining crypto prices and reduced trader confidence.
According to CryptoQuant’s latest dashboard, decentralized borrowing volumes have fallen consistently since August as users cut leverage and reduce exposure.
The pullback underscores how sensitive DeFi borrowing remains to price volatility and broader market sentiment.
Aave, one of the largest DeFi lending platforms, illustrates the scale of the contraction.
CryptoQuant reports that weekly borrowing of major stablecoins USDT and USDC on Aave plunged by 69%, sliding from a peak of $6.2 billion to just $1.9 billion by the end of November.
This decline in incremental borrowing signals a clear reduction in speculative risk-taking across decentralized markets, CryptoQuant noted in its analysis, highlighting how traders are stepping back as volatility persists.
While DeFi borrowing continues to shrink, Crypto Borrowing on centralized platforms is starting to tell a different story.
Centralized borrowing initially mirrored DeFi’s decline during the market correction, but recent data suggests a divergence may be forming.
CryptoQuant reports that several CeFi platforms are seeing renewed borrowing demand — even as prices remain under pressure.
Nexo offers a clear example. Weekly retail credit withdrawals on the platform dropped from $34 million in mid-July to $8.8 million by mid-November.
However, the following week delivered a sharp rebound to $23 million, representing a 155% week-on-week surge.
CryptoQuant attributes this behavior to investors choosing to borrow against their crypto holdings rather than liquidating assets at depressed valuations — a classic defensive strategy during downturns.
The rebound in Crypto Borrowing on CeFi platforms suggests that centralized lenders are increasingly functioning as liquidity backstops during periods of stress.
Rather than exiting positions, investors are tapping crypto-backed loans to access short-term cash while maintaining long-term exposure to digital assets.
This dynamic highlights a fundamental behavioral difference between DeFi and CeFi users during corrections.
According to CryptoQuant, Nexo’s cumulative credit withdrawals reached $817 million in 2025, positioning it as one of the most active centralized venues for crypto-backed borrowing this year.
This pattern shows how CeFi platforms absorb liquidity demand when flexibility and capital preservation become priorities, the data firm explained.
Crypto Borrowing data now points to a deeper structural reality: centralized lenders play a stabilizing role when markets turn volatile.
While DeFi borrowing contracts rapidly as automated liquidations and risk parameters tighten, CeFi platforms offer alternative borrowing channels with different risk profiles, user protections, and behavioral incentives.
CryptoQuant’s analysis suggests that rather than competing directly, DeFi and CeFi borrowing markets increasingly complement one another — with each serving different needs depending on market conditions.
As volatility persists, Crypto Borrowing trends indicate that centralized platforms may continue to attract demand from investors seeking liquidity without capitulation.
