How private credit cracks at BlackRock, Blue Owl could hit crypto and DeFi markets
Stress in the private credit market, evidenced by BlackRock and Blue Owl limiting withdrawals, risks spilling into crypto and DeFi markets.Summary
Cracks in the $3.5 trillion private credit market, highlighted by BlackRock's $26 billion fund limiting withdrawals and similar stress at Blue Owl, are raising concerns about contagion to digital assets. Experts warn that if redemption pressure forces private credit funds to unwind positions, it could trigger broader deleveraging across asset classes, creating a significant second-order shock for risk assets like Bitcoin, especially amid existing macro pressures like an energy shock. A second transmission channel exists through tokenized private credit products, which are growing on-chain. A recent example involved a tokenized Fasanara Capital strategy whose value dropped after the underlying loan faced bankruptcy, pushing leveraged borrowers on DeFi platforms like Morpho close to liquidation. This demonstrates how traditional credit stress can directly transmit to on-chain markets when tokenized credit is used as collateral in DeFi.
(Source：CoinDesk)