Key Notes
- Bitwise CEO predicts crypto credit markets will expand dramatically within a year.
- On-chain lending protocols are already seeing double-digit growth.
- Tokenized credit products and real-world asset loans are also emerging sectors.
Bitwise Asset Management chief executive Hunter Horsley believes the crypto industry’s next explosive sector will be borrowing and credit.
In a recent post on X, Horsley said that within six to twelve months, this sector will be “the big story,” adding that the trend will grow over the next several years.
He highlighted two forces driving this growth. First, with nearly $4 trillion in crypto assets already circulating, investors will increasingly choose to borrow against their holdings instead of selling them.
Second is the fast-growing tokenization sector. According to Horsley, as trillions of dollars’ worth of stocks and other traditional assets become tokenized, small investors will be able to borrow against their assets directly on-chain for the first time.
6-12 months from now, the big story in crypto is going to be credit and borrowing.
It will explosively grow over the next few years.
Two vectors:
1. There’s nearly $4 trillion dollars of crypto and growing: when people can borrow against this crypto, rather than sell, they…
— Hunter Horsley (@HHorsley) September 18, 2025
Horsley concluded that the crypto borrowing and credit sector “is just getting started” and will fundamentally reshape global capital markets.
DeFi Lending Sector Booms
Horsley’s prediction comes amid recent growth across decentralized finance.
According to industry data , the total crypto lending market was about $36.5 billion in late 2024, rebounding sharply from the downturn that followed the 2021 peak.
Open on-chain borrowing surged 959% since late 2022, reaching $19.1 billion by the end of last year.
Aave AAVE $309.1 24h volatility: 5.2% Market cap: $4.71 B Vol. 24h: $492.89 M remains the leader , now responsible for more than 75% of Ethereum’s ETH $4 601 24h volatility: 2.4% Market cap: $555.30 B Vol. 24h: $44.19 B lending activity. The lending protocol currently posts a 15% monthly surge in TVL to roughly $41.9 billion.
Another leading DeFi lender, Morpho, with $8.5 billion in TVL, reported a 34% jump over the same period.
Top lending and borrowing tokens have seen a 3.65% surge in their top market cap in the past day. This week’s top crypto coin of the sector, Kamino Finance KMNO $0.0884 24h volatility: 20.8% Market cap: $247.94 M Vol. 24h: $203.06 M , has posted 37% value gain in the past seven days.
Tokenized Credit on the Rise
Beyond traditional crypto lending, tokenized credit markets are gathering pace amid clearer regulatory proposals . Real-world asset (RWA) loans on-chain have climbed from roughly $5 billion in 2022 to more than $24 billion by mid-2025.
Tokenized Treasury products alone have doubled to about $4 billion, with major asset managers such as Franklin Templeton bringing money-market funds onto blockchains.
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