Last updated on March 10th, 2026 at 11:54 am
A growing divide is emerging between traditional private credit funds and a new wave of Bitcoin-backed digital credit products, as performance data highlights sharp differences in price stability and investor confidence.
Shares of FSK, one of the largest publicly traded business development companies and a key proxy for the private credit sector, have fallen about 45% over the past year. The stock now trades near $13, well below its reported net asset value of $21.99, reflecting investor skepticism about portfolio marks and rising credit stress.
— Adam Livingston (@AdamBLiv) February 22, 2026
Private credit faces valuation pressure
Private credit expanded rapidly after the 2008 financial crisis, filling a gap left by traditional banks. By early 2025, the global market had grown to roughly $3 trillion, according to estimates from Morgan Stanley.
However, recent filings show stress building. FSK reported a $13.4 billion portfolio with non-accruals climbing to 2.9% at fair value. As borrower conditions tighten, discounts to NAV have widened across parts of the sector. Analysts say the structure of many private credit vehicles, which rely on periodic valuations and limited liquidity windows, can amplify concerns during volatile periods.
Regulators, including the International Monetary Fund and the Bank for International Settlements, have previously warned about liquidity mismatches in retail-facing private credit products.
Bitcoin-backed digital credit draws attention
In contrast, Strategy’s exchange-listed perpetual preferred security, known as STRC, has traded close to its $100 par value while delivering double-digit annual yields. The security is listed on Nasdaq and offers monthly dividends, with pricing adjusted to encourage trading near par.
Strategy holds more than 700,000 Bitcoin on its balance sheet, providing what supporters describe as a transparent asset backstop. Unlike private credit funds that rely on periodic marks, STRC trades in real time on public markets.
Meanwhile, Bitcoin showed new signs of a bear market, according to recent market analysis. This analysis highlights an increase in sharp 30-day drops and weaker upward momentum.
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