BlackRock’s $26 billion private credit fund has begun restricting withdrawals, the latest sign of stress in a $3.5 trillion market that is now raising concerns about potential spillover effects into cryptocurrency markets. The move, reported Friday by Bloomberg, follows similar actions by Blue Owl, which sold $1.4 billion in loans last month to meet investor redemption requests and has exposure to a struggling U.K. Property lender.
Shares of major asset managers reacted negatively to the news, with BlackRock (BLK), Apollo Global Management (APO), Ares Management (ARES), and KKR all experiencing declines of 4% to 6% on Friday, extending a downward trend throughout 2026. Blue Owl Capital Inc. (OWL) has seen its stock price fall over 30% year-to-date, and is down 48.85% over the past year, as investor concern mounts.
The potential for contagion to digital assets stems from a broader deleveraging that could be triggered if redemption pressures force private credit funds to unwind their positions, according to Andreja Cobeljic, head of derivatives trading at Swiss crypto bank AMINA Bank. “If redemption pressure forces private credit funds to unwind positions, it could trigger broader deleveraging across asset classes that could ripple through digital assets including bitcoin,” Cobeljic warned in an emailed note.
U.S. Banks held approximately $300 billion in loans to private credit providers as of mid-2025, and an additional $285 billion to private equity funds, creating a potential pathway for credit woes to extend into the banking sector, Cobeljic added. While this level of exposure might be manageable in isolation, she cautioned that it takes on a different dimension when combined with a global deleveraging event, an energy shock, and diminishing expectations for interest rate cuts.
The growing prevalence of tokenized private credit products – loans and funds packaged as tokens on public blockchains – adds another layer of complexity. While the on-chain market for private credit remains small, at just under $5 billion as of early 2026, according to data from rwa.xyz, its rapid growth as part of the broader real-world asset (RWA) trend means that stress in traditional private credit markets could directly impact decentralized finance (DeFi) markets.
A recent example of this interconnectedness involved the insolvency of First Brands Group in 2025. The event impacted a private credit strategy managed by Fasanara Capital, and a tokenized version of that strategy, mF-ONE, issued on the Midas RWA platform and used as collateral in the Morpho protocol. A devaluation of the underlying fund due to the insolvency caused the token’s net asset value to fall by approximately 2%, bringing highly leveraged borrowers close to liquidation and restricting liquidity on the platform. While lenders ultimately avoided losses, the incident demonstrated how traditional credit risks can be transmitted to on-chain markets through tokenized private credit.
Teddy Pornprinya, co-founder of the Real-World Asset protocol Plume, cautioned that institutions entering the crypto market are often doing so through products that are not fully understood, even by experienced DeFi participants. “Real credit products can harbor complex risks that are not always obvious to crypto investors, including volatile swings in net asset value and stated yields that do not fully account for fees or credit risk,” he said.
Blue Owl’s recent actions included accelerating redemptions and liquidating $1.4 billion in assets to return capital to investors. CEO Craig Packer characterized the move as a “strategic transaction,” but short interest in the company has reached an all-time high. The company also made a $1 billion investment in BlackRock, a move seen by some analysts as a defensive strategy to gain stability and diversification.
