Private Credit’s $3 Trillion Surge Mirrors Bond Market Risks
Private credit has evolved from niche lending into a $3 trillion force reshaping finance. The asset class now mirrors public bond markets in scale and structure, with Morgan Stanley projecting $5 trillion by 2029. This growth spans real estate, infrastructure, and investment-grade borrowers—blurring lines between private and public debt markets.
‘The convergence is undeniable,’ says one credit manager. Senior secured loans and other fixed-income products once exclusive to public markets now dominate private lending. Yet this rapid expansion raises red flags: liquidity mismatches, covenant erosion, and cyclical risks reminiscent of pre-2008 corporate debt markets.
For crypto investors, the private credit boom signals institutional capital seeking yield beyond traditional bonds—a trend that could spill into decentralized finance (DeFi) and tokenized debt instruments. Watch for crossover strategies blending private credit with blockchain-based solutions.