"Tokenization and DeFi Are Poised to Make Crypto Lending Accessible to Every Investor"

Bitwise CEO Anticipates Fast Expansion in Crypto Lending Sector

Hunter Horsley, CEO of Bitwise, expects the crypto lending industry to experience rapid growth over the next year to a year and a half. Horsley attributes this surge to two main factors: the increasing value of crypto assets and the accelerating tokenization of conventional financial instruments. He pointed out that with the global cryptocurrency market now worth about $4 trillion, investors can now keep their digital assets while using them as collateral for loans, which allows for tax advantages and helps maintain the long-term worth of their holdings.

Horsley also identified asset tokenization, especially of stocks and bonds, as a key catalyst. This development could soon let retail investors use their tokenized assets as blockchain-based collateral, opening up credit options that were once limited to major institutions or wealthy individuals with substantial collateral or connections. He noted that even those with just $7,000 in equities might be able to secure loans, greatly expanding who can access credit.

Recent industry data lends support to Horsley’s outlook. Reports indicate that the total crypto loan value soared to $53 billion in the second quarter of 2025, marking a 27% rise in just three months. Decentralized finance (DeFi) protocols such as

and have witnessed significant increases in loan activity, with outstanding borrowings hitting new highs by mid-2025. Staking activity has also climbed, surpassing $100 billion in staked crypto thanks to greater institutional involvement and blockchain improvements.

Within centralized finance (CeFi), the total value of loans reached $36.5 billion by late 2024, bouncing back after the downturn post-2021. On-chain borrowing grew by 959% from late 2022, hitting $19.1 billion by last year’s end. Leading DeFi lending platform Aave experienced a 15% monthly rise in total value locked (TVL), bringing it to $41.9 billion, while Morpho, another major DeFi lender, saw its TVL grow by 34% in the same timeframe.

The proliferation of tokenized credit markets is also making headlines, with on-chain real-world asset (RWA) loans growing from roughly $5 billion in 2022 to over $24 billion by mid-2025. Tokenized Treasury products alone have doubled to around $4 billion, as prominent asset managers like Franklin Templeton introduce money-market funds to blockchain networks.

Despite these advances, the industry still faces obstacles. Regulatory uncertainty around tokenized equity and bonds persists, and longstanding safety concerns in crypto lending remain, especially following the failures of lenders such as Celsius,

, and BlockFi during the 2022–2023 slump. Nevertheless, Horsley remains confident, suggesting the market is poised for sustainable growth even in the face of these challenges.

The Bitwise CEO’s outlook echoes wider industry momentum. As decentralized finance and tokenization continue to evolve, lending and borrowing are set to become foundational to the crypto world. The merging of legacy financial systems and blockchain technology may transform how capital flows are managed and accessed, potentially helping to bridge

between conventional finance and the new world of digital assets.