Cracks in the global private credit market are rattling investors, raising fears the tensions could spill over to crypto markets.
Bloomberg reported Friday that BlackRock’s $26 billion private credit fund had begun limiting withdrawals amid rising redemption requests. The move follows similar tensions at Blue Owl, which sold $1.4 billion in loans last month to meet withdrawals and was reportedly exposed to a failed British property lender.
Shares of major asset managers, including BlackRock (BLK), Apollo Global Management (APO), Ares Management (ARES) and KKR, slipped 4% to 6% on Friday, extending their 2026 rout.
Read more: Blue Owl’s liquidity crisis has investors bracing for 2008-like fallout.
If redemption pressure forces private credit funds to unwind their positions, it could trigger broader deleveraging across asset classes, which could spill over into digital assets including bitcoin. warned Andreja Cobeljic, head of derivatives trading at Swiss crypto bank AMINA Bank in an emailed note.
Credit stress meets energy shock
U.S. banks have extended nearly $300 billion in loans to private credit providers in mid-2025 and another $285 billion to private equity funds, Cobeljic wrote, carrying the risk that credit problems could spread to the banking sector.
“In isolation it would be manageable,” he said. “But emerging in the middle of a broader global deleveraging event, alongside an energy shock and collapsing rate cut expectations, it’s a different conversation.”
“For risky assets, including cryptocurrencies, a disorderly unwinding would represent a significant second-order shock that current prices do not reflect,” he said.
Contagion to tokenized asset markets
A second credit risk channel could appear directly on the blockchain tracks.
Tokenized private credit products – loans and funds packaged and issued on public blockchains as tokens – have grown rapidly as part of the broader real-world assets (RWA) trend. According to data from rwa.xyz, the private on-chain credit market now stands at just under $5 billion. This is still small compared to the global private credit market of around $3.5 trillion in 2025, estimated by the Alternative Credit Council.
But the growing presence of these assets in decentralized finance (DeFi) means that strains on underlying loans could spill over directly into crypto markets.
“Institutions are getting into crypto, but often with products that even degens and DeFi natives don’t fully understand,” said Teddy Pornprinya, co-founder of real-world assets protocol Plume.
Real-world credit products can carry complex risks that aren’t always obvious to crypto investors, he said, including volatile fluctuations in net asset value and overall returns that don’t fully reflect fees or credit risk.
A recent episode shows how off-chain credit stress can spill over into DeFi.
The 2025 bankruptcy of auto parts supplier First Brands Group has affected a private credit strategy managed by Fasanara Capital, according to a report from risk consultancy Chaos Labs. A tokenized version of the strategy, mF-ONE, was issued on the Midas RWA platform and used as collateral for borrowing on the Morpho protocol.
When the underlying fund reduced bankruptcy exposure, the token’s net asset value fell by around 2%, pushing highly leveraged borrowers to the brink of liquidation and tightening liquidity on the platform. Lenders ultimately avoided losses, but the episode highlighted how tokenized private credit used as DeFi collateral can transmit the stress of traditional credit onto on-chain markets.
