Jul 9, 2026, 6:13 p.m.
3 min read
Summary
- Redemption requests in the $2 trillion private credit market surged to $15.6 billion in the second quarter, breaching standard 5% quarterly caps at most business development companies and leaving many investors only partly paid.
- Investors pulled nearly $5 billion from U.S.-listed spot bitcoin ETFs in the second quarter, contributing to a roughly 14 percent drop in bitcoin’s price and its third straight quarterly loss.
- The simultaneous rush for liquidity in bitcoin ETFs and private credit, alongside a depleted U.S. strategic petroleum reserve, is stoking concerns that financial and physical buffers against risk are eroding across markets.
If the second quarter was bad for bitcoin exchange-traded funds (ETFs), with record outflows of nearly $5 billion, it was even more brutal for private credit.
Investors yanked out $4 billion from U.S.-listed spot bitcoin ETFs, led by BlackRock’s IBIT in June alone, according to data source SoSoValue. The market felt the heat as bitcoin's BTC$63,313.58 price fell roughly 14% in the second quarter, dipping below $60,000 to register its third straight quarterly loss.
However, that outflow was dwarfed by signs of liquidity stress in the $2 trillion private credit market, where investors requested a total of $15.6 billion in redemptions during Q2 and were only partially satisfied. According to data tracked by Fitch, redemption requests exceeded the standard 5% quarterly cap at 10 of the 16 business development companies (BDCs), meaning many investors received only a portion of their money and remain in line for future quarters.
Analysts offered varying explanations for the ETF outflows and crypto weakness, with most pointing to capital rotation into the AI trade and other high-profile opportunities. SpaceX’s blockbuster IPO, which began trading on Nasdaq on June 12, was frequently cited as a magnet for institutional dollars.
Others took a more macro view. Strive CEO Jack Mallers, among others, described bitcoin’s selloff as a warning of a macro fiat liquidity crunch. Bitcoin has a history of moving early and aggressively on liquidity shifts and is often viewed as one of the most sensitive assets to changes in money supply growth, Treasury operations, and overall financing conditions.
Average requests rose to 10.3% of shares from 9.7% in Q1, but ranged widely (1.3%–38.1% at Blue Owl’s OTIC). Many requests were follow-ups from investors who were only partly satisfied last quarter. New inflows fell by about 56% on average, so most funds saw net outflows of roughly 3% of the prior quarter’s net asset value.
Fitch, therefore, expects continued redemptions in months ahead.
"With BDCs capping redemptions at 5% quarterly, unfulfilled requests will lead to persistent elevated redemptions for many firms in the coming quarters," ratings agency Fitch warned," the ratings agency said.
Same story but different structures
Bitcoin ETFs are liquid, exchange-traded vehicles, where outflows directly impact the spot price of BTC. Private credit BDCs are the opposite: illiquid, long-duration lending vehicles with built-in quarterly gates.
Still, the fact that investors rushed for exit in both at the same time does point to broader caution around liquidity and risk appetite. Amid all this, energy markets continue to send risk-off signals, with the U.S. strategic petroleum reserve falling to lowest since 1983. So, if energy market remains disrupted, the government now has significantly less buffer to flood the market with oil and keep prices lower.
All this points to tougher environment for risk asset bulls.
Singapore-based QCP Capital put it best: "With no monetary cushion coming, the physical buffers matter more. The SPR has drawn down to its lowest since 1983, Strategy sold BTC for the first time to fund dividends, and private-credit redemption requests breached the 5% gates across eight semi-liquid funds."
"Different corners, same pattern: the buffers are wearing thin," it said.
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