BlackRock’s private credit fund faces challenges, impacting cryptocurrency values and decentralized finance markets.

Experts caution that strain within the $3.5 trillion private credit sector may extend into digital assets via both macroeconomic contagion and tokenized credit markets.

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Key points:

• BlackRock’s $26 billion private credit fund is the most recent in the industry to restrict withdrawals, underscoring escalating financial strain.
• The challenges in private credit, coupled with macroeconomic shocks like oil supply interruptions, could prompt broader deleveraging, which may adversely affect cryptocurrency values, according to the head of derivatives trading at AMINA Bank.
• Tokenized private credit instruments might facilitate a direct pathway for stress to impact decentralized finance markets.

Instabilities in the global private credit sphere are unsettling investors, raising alarms that the resulting stress could affect the cryptocurrency markets.

Bloomberg reported on Friday that BlackRock’s $26 billion private credit fund has started to impose withdrawal limits in response to increasing redemption demands. This decision follows similar pressures at Blue Owl, which liquidated $1.4 billion in loans last month to address withdrawal requests and is reportedly linked to a collapsed U.K. property lender.

Shares of major asset management firms such as BlackRock (BLK), Apollo Global Management (APO), Ares Management (ARES), and KKR experienced declines of 4%-6% on Friday, further extending their downturn in 2026.

Read more: Blue Owl liquidity crisis has investors bracing for 2008-style fallout

Should redemption pressures compel private credit funds to liquidate their positions, it could incite broader deleveraging across various asset classes, potentially impacting digital assets like bitcoin BTC$68,149.64, as warned by Andreja Cobeljic, head of derivatives trading at Swiss crypto bank AMINA Bank, in an emailed communication.

Credit strain meets energy crisis

As of mid-2025, U.S. banks had lent nearly $300 billion to private credit entities and an additional $285 billion to private equity firms, Cobeljic noted, indicating the risks that credit issues could extend to the banking sector.

"In isolation, this would be manageable," he stated. "However, emerging amid a larger global deleveraging event, combined with an energy crisis and declining rate-cut expectations, presents a different scenario."

"For risk assets, including cryptocurrencies, a disorderly unwinding in this context would signify a considerable second-order shock that current pricing does not account for," he remarked.

Contagion to tokenized asset markets

A second pathway for credit risk may emerge directly on blockchain technology.

Tokenized private credit instruments—loans and funds packaged and issued on public blockchains—are rapidly growing as part of the larger real-world asset (RWA) trend. Data from rwa.xyz indicates that the on-chain private credit market currently approximates $5 billion. This figure remains negligible compared to the estimated $3.5 trillion global private credit market in 2025, according to the Alternative Credit Council.

However, the increasing presence of these assets in decentralized finance (DeFi) implies that stress in the underlying loans may directly affect cryptocurrency markets.

"Institutions are entering the crypto space, often with products that even seasoned traders and DeFi experts do not fully understand,” noted Teddy Pornprinya, co-founder of the real-world asset protocol Plume.

Real-world credit products can entail intricate risks that may not always be evident to crypto investors, including fluctuating net asset values and headline yields that do not fully account for fees or credit risk.

A recent incident illustrates how off-chain credit strain can impact DeFi.

A report by risk advisory firm Chaos Labs indicated that the 2025 bankruptcy of auto-parts supplier First Brands Group influenced a private credit strategy managed by Fasanara Capital. A tokenized representation of the strategy, mF-ONE, had been launched on the Midas RWA platform and utilized as collateral for borrowing on the Morpho protocol.

When the underlying fund marked down its exposure related to the bankruptcy, the token’s net asset value decreased by approximately 2%, bringing highly leveraged borrowers close to liquidation and constricting liquidity on the platform. While lenders ultimately avoided losses, this incident underscored how tokenized private credit used as collateral in DeFi can transmit traditional credit stress to on-chain markets.