Crypto borrowing activity is beginning to stir after hitting a low late last year, but the rebound remains cautious rather than speculative. Data from both decentralized and centralized lending platforms shows leverage slowly returning to the market in early 2026, though activity is still far from the highs seen during 2025’s bull phase.
Borrowing demand is rising again.
Credit withdrawals on @Nexo reached $24M in January (+9% MoM), signaling a steady recovery, while Aave data shows leverage returning across DeFi.
The rebuild has started, but remains cautious. pic.twitter.com/ooAduSEgo2
— CryptoQuant.com (@cryptoquant_com) February 5, 2026
DeFi lending sees a careful rebound
On Aave v3, stablecoin borrowing bottomed out in December 2025 and has edged higher through January 2026. While total borrow volumes have increased from their lows, the pace of recovery suggests users are rebuilding leverage carefully, not rushing back into aggressive risk-taking. This slower climb points to a market still digesting last year’s correction rather than gearing up for a full-blown speculative cycle.
Ethereum borrowing has been a notable bright spot. From September 2024 to January 2026, ETH borrow volumes on Aave v3 rose sharply, reaching around 1.0 million ETH in January. That marks a 48% month-on-month increase and nearly three times the level recorded in late 2024, highlighting renewed demand for ETH-based leverage.
CeFi credit activity remains subdued
Centralized lenders are seeing a similar, measured recovery. On Nexo, one of the largest CeFi lending platforms, credit withdrawals reached $24 million in January, up 9% month-on-month. Despite the increase, overall borrowing remains structurally lower than mid-2025 levels, reflecting lingering caution among borrowers after the broader market downturn.
ETH is also playing a growing role as collateral on Nexo. It now accounts for 12% of total pledged collateral, up from 9% in the second quarter of 2024. This suggests more ETH holders are borrowing against their assets to access liquidity without selling. Bitcoin, however, continues to dominate, making up 56% of total collateral.
Historically, crypto borrowing has been highly procyclical, expanding during bullish periods when confidence, asset prices, and leveraged positionscc rise together.
Meanwhile, Crypto markets experienced renewed turbulence this week following the announcement of Kevin Warsh as President Trump’s pick for Federal Reserve Chair.
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