Growing stress in the global private credit market is raising concerns among investors, with analysts warning that turbulence in the sector could eventually spill over into cryptocurrency markets through both macro contagion and blockchain-based credit products.
According to a report from Bloomberg, BlackRock has begun restricting withdrawals from its $26 billion private credit fund as redemption requests increase. The move follows signs of strain at Blue Owl Capital, which sold about $1.4 billion worth of loans last month to meet investor withdrawals and is reportedly exposed to a failed U.K. property lender.
The pressure has weighed on major asset managers. Shares of BlackRock, Apollo Global Management, Ares Management and KKR each fell between 4% and 6% on Friday, adding to losses already seen across the sector this year.
If redemption pressures persist, private credit funds may be forced to unwind positions, potentially triggering broader deleveraging across financial markets. Such a process could ripple into digital assets including Bitcoin, according to Andreja Cobeljic, head of derivatives trading at AMINA Bank.
Credit stress amid broader macro risks
Cobeljic noted that U.S. banks had extended close to $300 billion in loans to private credit firms by mid-2025, along with another $285 billion to private equity funds. That level of exposure raises the risk that troubles in private credit could eventually reach the banking system.
“In isolation this would likely be manageable,” Cobeljic said. “But when it emerges during a broader global deleveraging cycle — alongside an energy shock and fading expectations for interest-rate cuts — it becomes a much more serious issue.”
In that environment, a disorderly unwind in private credit could represent a major secondary shock for risk assets, including cryptocurrencies, that markets may not yet be fully pricing in.
Tokenized credit introduces new risks
Another possible transmission channel lies in the growing market for tokenized private credit — traditional loans that are packaged as blockchain-based tokens and integrated into decentralized finance.
Data from rwa.xyz shows the on-chain private credit sector has grown to nearly $5 billion. While still small compared with the roughly $3.5 trillion global private credit market estimated for 2025 by the Alternative Credit Council, its expanding role in DeFi increases the potential for credit stress to spread into crypto markets.
“Institutional capital is entering crypto with increasingly complex financial products that even many DeFi participants may not fully understand,” said Teddy Pornprinya, co-founder of the real-world asset protocol Plume.
He warned that real-world credit products can carry hidden risks, including net asset value fluctuations and headline yields that may not accurately reflect fees or credit exposure.
A recent example highlights how off-chain credit issues can reach on-chain markets. Research from Chaos Labs found that the 2025 bankruptcy of auto-parts supplier First Brands Group affected a private credit strategy managed by Fasanara Capital.
A tokenized version of the strategy, known as mF-ONE, had been issued through the Midas real-world asset platform and was used as collateral for borrowing on the Morpho DeFi protocol.
When the underlying fund marked down its exposure following the bankruptcy, the token’s net asset value fell by about 2%. The drop pushed heavily leveraged borrowers close to liquidation and tightened liquidity on the platform.
Although lenders ultimately avoided losses, the episode demonstrated how tokenized private credit used as DeFi collateral can transmit traditional credit stress directly into blockchain-based markets.
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