Last Week: Lending Declines, Ethereum Falters in Crypto World

Last week in the world of cryptocurrency, we saw some interesting developments. Crypto lending, a popular trend in recent years, has taken a hit recently. According to a report from Galaxy Digital, the crypto lending market has shrunk by a whopping 43% since its peak in 2021. This significant decline is largely attributed to the collapse of major lenders like Genesis, Celsius Network, BlockFi, and Voyager, all of which filed for bankruptcy. This had a domino effect on the market, causing a loss of trust and confidence among investors and users.

Despite Galaxy Digital’s belief that the market will bounce back, many people have been skeptical. The collapse of these major lending platforms has left a stain on the industry, making it challenging to attract new users. The lack of transparency, mismanagement of risks, and overall market instability have created a trust issue that will take time to overcome. It will be an uphill battle to convince newcomers to enter the lending space unless significant changes are made to address these concerns.

On another note, rumors have surfaced suggesting that former US President Donald Trump is planning to launch a crypto game soon. While details about the game and its connection to cryptocurrency remain scarce, it is expected to have a similar feel to Monopoly. However, launching a crypto game in the current climate may prove to be a challenge. The Web3 gaming market has been shrinking, with investments plummeting by 71% in the first quarter of 2025. Trump’s previous venture into the crypto space with the $TRUMP memecoin, which has lost over 85% of its value since launch, does not bode well for his upcoming game launch.

Meanwhile, Ethereum, one of the leading cryptocurrencies, has been struggling over the past year, showing a significant decline of 48%. The primary reason behind Ethereum’s downturn is its high transaction fees. Despite network upgrades, Ethereum’s fees remain considerably higher than those of its competitors. This cost factor has deterred users, especially those in emerging economies, from engaging with the platform. As a result, developers and users are increasingly turning to alternative blockchains that offer lower fees and better user experiences.

The challenges faced by Ethereum highlight a broader trend in the market. Brand recognition alone is no longer sufficient to maintain relevance in the competitive blockchain space. Affordability and usability are now key factors driving user and developer adoption. Ethereum’s struggles serve as a cautionary tale for other blockchain projects: failure to address these critical aspects could lead to a loss of market share and relevance. As the crypto landscape continues to evolve, adaptability and user-centric design will be crucial for long-term success.