Blockchain-Based Private Loan Sees Revival Amid Crypto Turbulence

Rupam Roy
December 18, 2023 Updated July 21, 2025
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Blockchain-Based Private Loan Crypto

A surprising resurgence is witnessed in the realm of blockchain-based private loans amid the ongoing turbulent scenario in the cryptocurrency market. Meanwhile, the companies, seeking refuge from the soaring interest rates, are turning their focus to digital ledgers, fostering a 55% surge in active private loans since the year’s commencement, totaling around $408 million by November 28, according to RWA.xyz.

Notably, this revival, albeit shy of last year’s peak, unfolds against a traditional private credit market valued at $1.6 trillion. Here’s a closer look at how blockchain lending is staging a comeback and the market sentiment steering this shift.

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Blockchain Lending Gains Momentum

Despite a challenging year for digital assets, blockchain-based private credit is experiencing a revival, with active loans surpassing $408 million in 2023. Noteworthy is the transparency and efficiency offered by blockchain protocols, such as Centrifuge, Maple Finance, and Goldfinch.

Meanwhile, these platforms leverage Ethereum and stablecoins like USDC, providing borrowers access to funds through smart contracts. Notably, Agost Makszin from Lendary (Asia) Capital believes that the enhanced transparency and liquidation mechanisms on the blockchain have effectively mitigated lending risks, according to a Bloomberg report.

In addition, champions of digital ledgers emphasize the advantages, with Maple Finance’s co-founder, Sidney Powell, suggesting plans to utilize blockchain and smart contracts for loan management, cost reduction, and faster funding, aiming to gain a competitive advantage. This comes as traditional private credit faces criticism for its opacity, and the blockchain version proves to be swifter and more transparent in managing loans.

Also Read: Bitcoin, Pepe Coin Tumble As HNT Takes The Lead

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Market Sentiment and Crypto Rollercoaster

While blockchain lending gains ground, the broader crypto market faces volatility, marked by a recent downturn after a significant rally. Notably, the recent slump has contributed to investors engaging in profit booking post-rally, triggered by anticipation of a Bitcoin Spot ETF approval and optimism surrounding the Bitcoin Halving event.

In addition, the Federal Reserve’s dovish stance, keeping interest rates unchanged and signaling potential rate cuts in 2024, initially boosted investor confidence, contributing to the recent crypto surge. However, the market’s retreat indicates that challenges persist, and the sector grapples with its tarnished reputation.

Meanwhile, as blockchain-based private lending charts a recovery path, the article explores the contrast with traditional finance and the role of transparency in reshaping the lending landscape. Amid the crypto market’s ebbs and flows, it remains to be seen whether blockchain lending can establish itself as a robust alternative in the financial realm.

Also Read: Veteran Investor Shifts Bitcoin (BTC) Price Forecast From $100K To $200K

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Rupam is a seasoned professional with three years of experience in the financial market, where he has developed a reputation as a meticulous research analyst and insightful journalist. He thrives on exploring the dynamic nuances of the financial landscape. Currently serving as a sub-editor at Coingape, Rupam's expertise extends beyond conventional boundaries. His role involves breaking stories, analyzing AI-related developments, providing real-time updates on the crypto market, and presenting insightful economic news. Rupam's career is characterized by a deep passion for unraveling the complexities of finance and delivering impactful stories that resonate with a diverse audience.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.