Crypto Markets Retreat as Moody’s Downgrades U.S. Credit Rating, Sparking Risk-Off Sentiment
Crypto assets fell on Saturday in tandem with stocks after Moody’s downgraded the U.S. sovereign credit rating from Aaa to Aa1. The rating cut heightened concerns over America’s fiscal trajectory and macroeconomic risks, driving cautious sentiment among investors.
Leading cryptocurrencies—Ether (ETH), XRP, and Dogecoin (DOGE)—declined by roughly 3%, while the total crypto market capitalization settled near $3.3 trillion, trimming earlier gains following a brief peak.
Moody’s cited ballooning deficits, rising interest burdens, and political gridlock over fiscal policy as the rationale behind the downgrade, joining Fitch and S&P in lowering the U.S. from its previously untarnished triple-A status.
The White House responded swiftly, with President Donald Trump’s spokespeople decrying the decision as politically charged.
The downgrade also rattled traditional markets: U.S. Treasury yields jumped, with the 10-year yield hitting 4.49%, and S&P 500 futures slipped 0.6% after hours.
While Bitcoin and other decentralized assets have historically benefited from concerns around U.S. debt and dollar depreciation, short-term uncertainty often triggers risk-off moves, prompting institutional traders to reduce holdings.
Market watchers warn that a deeper pullback could occur as investors take profits before the next upward leg. “Bitcoin is currently holding above $104,000, but selling pressure is mounting near resistance,” said FxPro chief analyst Alex Kuptsikevich. “This suggests a likely short-term decline before a potential rebound.”
