The US private credit market, valued at over $2 trillion, is flashing stress signals not seen since 2017, raising the question of what deteriorating loans could mean for Bitcoin. The connection runs through liquidity and risk sentiment rather than any direct exposure between the two markets. Non-accrual loans are credits in which the borrower has stopped making payments or in which default is likely.
That metric just hit a multi-year high. The Financial Times reported the figures, based on Solve data. Non-accrual loans reached a median of 2.8% of cost across the twenty largest listed US Business Development Companies during the second quarter.
That level compares with late March, when the same measure sat near 2%. It marks the highest reading in nearly a decade, comparable to stress triggered by the 2017 oil price collapse. Redemption pressure compounds the picture.
Some funds received withdrawal requests reaching 40% of net asset value, though most gates limit quarterly redemptions to 5%. "...In the old days a bad loan slid in plain sight. 100 cents, then 95, then 90, then 70. A loan is marked at 100 one month and zero the next.
That is why the redemptions are starting. Investors are finally asking what they actually own. And because this is where all the marginal credit in the economy now flows, if it seizes, the crunch does not stay contained...," Jeffrey P.
Follow us on X to get the latest news as it happens. Payment-in-kind arrangements are also expanding. That structure lets borrowers pay interest with more debt rather than cash, often signaling underlying repayment strain.
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