Recent data indicates that DeFi lending continues to gain popularity despite Coinbase's declining market share. The rise in demand for crypto-backed loans signals a paradigm shift in the financial sector.
Surge in DeFi Lending Demand
Data from Dune Analytics reveals significant growth in borrowing activity on Coinbase throughout 2025. Daily originations that initially started below $100 million have risen to over $600 million within just a few months, reflecting a growing interest from both retail and institutional clients in crypto-backed loans.
Challenges in Coinbase's Market Share
Despite the growth in DeFi lending, Coinbase is losing ground in the trading market. In July, the platform handled $101.7 billion in trading volume, which improved from the previous month but still resulted in a drop in its market share to 5.8% from 7% at the start of the year. This has positioned the company in ninth place among global exchanges amid increasing competition.
Balancing Two Fronts
The current trends indicate that Coinbase is in a challenging situation: on one hand, its centralized trading business is losing share, while on the other, the growing demand for DeFi lending represents a crucial bridge between traditional finance and the block economy. With accelerated institutional adoption of DeFi, Coinbase’s strict regulatory approach may provide it with a competitive edge in capturing new capital flows.
The outlook for Coinbase’s market behavior is becoming more complex given the layered factors of DeFi demand and increasing competition in centralized exchanges. Future changes in regulatory approaches are expected to significantly influence the company’s trajectory.
