A BlackRock private credit fund is the latest to show cracks, pressuring crypto prices and DeFi markets.

Rising stress in the global private credit market is beginning to unsettle investors, with analysts warning the strain could eventually spill over into crypto through both macro contagion and tokenized credit markets.

A report from Bloomberg on Friday said BlackRock has started limiting withdrawals from its $26 billion private credit fund as redemption requests increase. The move follows similar pressure at Blue Owl Capital, which sold about $1.4 billion in loans last month to meet withdrawal demand and reportedly has exposure to a failed U.K. property lender.

Shares of major alternative asset managers fell sharply in response. BlackRock, Apollo Global Management, Ares Management and KKR all dropped between 4% and 6% on Friday, extending a broader downturn for the sector in 2026.

If redemption pressures force private credit funds to unwind positions, the process could trigger wider deleveraging across financial markets — a development that may ripple into digital assets such as Bitcoin, according to Andreja Cobeljic, head of derivatives trading at AMINA Bank.

Credit strain meets macro headwinds

Cobeljic noted that U.S. banks had extended nearly $300 billion in loans to private credit providers by mid-2025, alongside another $285 billion in financing to private equity firms. That exposure raises the risk that mounting stress in the private credit sector could eventually reach the broader banking system.

“In isolation this would be manageable,” Cobeljic said. “But if it occurs in the middle of a broader global deleveraging cycle — combined with an energy shock and fading expectations for interest-rate cuts — the implications become far more serious.”

For risk assets, including cryptocurrencies, a disorderly unwinding of private credit positions could create a major second-order shock that markets may not yet be pricing in, he added.

Tokenized credit could transmit risk on-chain

Another potential channel of contagion lies in the rapidly growing market for tokenized private credit. These products package traditional loans or funds into blockchain-based tokens that can be traded or used as collateral in decentralized finance.

According to data from rwa.xyz, the on-chain private credit market has grown to nearly $5 billion. While still tiny compared with the roughly $3.5 trillion global private credit market estimated for 2025 by the Alternative Credit Council, its presence within DeFi systems is increasing.

That integration means problems in the underlying loans could potentially spread directly into crypto markets.

“Institutional investors are entering crypto with increasingly complex financial products that even many DeFi-native users may not fully understand,” said Teddy Pornprinya, co-founder of the real-world asset protocol Plume.

He noted that real-world credit products can carry hidden risks, including sudden net asset value swings or headline yields that fail to reflect fees and credit exposure.

A recent example illustrates how traditional credit stress can affect decentralized markets. According to a report by risk advisory firm Chaos Labs, the 2025 bankruptcy of auto-parts supplier First Brands Group impacted a private credit strategy run by Fasanara Capital.

A tokenized version of that strategy, known as mF-ONE, had been issued on the Midas real-world asset platform and was used as collateral for borrowing on the Morpho DeFi protocol.

When the underlying fund reduced the value of its exposure following the bankruptcy, the token’s net asset value dropped about 2%. The decline pushed highly leveraged borrowers closer to liquidation and tightened liquidity across the platform.

Although lenders ultimately avoided losses, the episode highlighted how tokenized private credit — when used as DeFi collateral — can transmit traditional credit stress directly into on-chain financial systems