Signs of strain in the global private credit market are beginning to unsettle investors, with analysts warning that turmoil in the sector could eventually spill over into cryptocurrency markets through both broader financial contagion and tokenized credit products.

According to a report from Bloomberg, BlackRock has started restricting withdrawals from its $26 billion private credit fund as redemption requests rise. The development follows similar pressure at Blue Owl Capital, which sold roughly $1.4 billion in loans last month to meet withdrawal demands and is reportedly exposed to a failed U.K. property lender.

The developments weighed on publicly traded alternative asset managers. Shares of BlackRock, Apollo Global Management, Ares Management and KKR fell between 4% and 6% on Friday, extending losses across the sector in 2026.

If redemption pressures intensify, private credit funds could be forced to unwind positions, potentially triggering wider deleveraging across financial markets. Such a scenario could also impact digital assets, including Bitcoin, according to Andreja Cobeljic, head of derivatives trading at AMINA Bank.

Credit stress and macro risks

Cobeljic noted that U.S. banks had extended nearly $300 billion in loans to private credit providers by mid-2025, along with an additional $285 billion to private equity firms. That level of exposure raises the possibility that stress in the private credit sector could spill over into the broader banking system.

“In isolation this would likely be manageable,” Cobeljic said. “But if it emerges during a broader global deleveraging cycle — alongside an energy shock and fading expectations for interest-rate cuts — the situation becomes far more complex.”

Under such conditions, a disorderly unwind in private credit markets could create a major secondary shock for risk assets, including cryptocurrencies, that current market pricing may not fully reflect.

Tokenized credit introduces new transmission risks

Another pathway for potential contagion lies in the rapidly growing market for tokenized private credit — traditional loans packaged as blockchain-based tokens and integrated into decentralized finance platforms.

Data from rwa.xyz shows that the on-chain private credit market has expanded to nearly $5 billion. Although still small compared with the roughly $3.5 trillion global private credit market estimated for 2025 by the Alternative Credit Council, the increasing presence of these assets in DeFi ecosystems could allow credit stress to directly impact crypto markets.

“Institutional capital is entering crypto through 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 risks that may not be obvious to crypto investors, including volatile net asset value fluctuations and yields that may not fully reflect fees or credit exposure.

A recent episode illustrates how traditional credit issues can reach decentralized markets. According to research from Chaos Labs, the 2025 bankruptcy of auto-parts manufacturer First Brands Group affected a private credit strategy managed by Fasanara Capital.

A tokenized version of that strategy, mF-ONE, had been issued through the Midas real-world asset platform and 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 dropped by roughly 2%. The decline pushed highly leveraged borrowers closer to liquidation and tightened liquidity across the platform.

Although lenders ultimately avoided losses, the episode demonstrated how tokenized private credit used as collateral in DeFi can transmit traditional credit stress directly into on-chain financial markets.