Moody’s Downgrades US Credit Rating, Bitcoin Rises as Safe Haven

Moody’s Ratings has downgraded the US credit rating from Aaa to Aa1 on May 16, 2025, amid rising debts and fiscal challenges, influencing global markets.

The downgrade signifies increased fiscal risk, impacting bond yields and equities, and enhancing Bitcoin’s role as a financial refuge.

Moody’s Ratings Service decided to lower the US ratings due to increased government debt and interest payments. This policy change hints at unresolved fiscal deficits potentially impacting the economy.

US Treasury yields rose while equity futures slipped as markets recalibrated risk, with Bitcoin gaining traction as an alternative asset. Investors are increasingly holding Bitcoin, aligning with its perceived safety.

“We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals,” according to Moody’s Official Statement , explaining the rationale for the downgrade.

Past downgrades, including those by S&P and Fitch, have historically led to similar market reactions. Tokens such as Bitcoin, Ethereum, and stablecoins experienced increased demand during such fiscal uncertainties.

With the US credit downgrade, Moody’s highlights ongoing deficits. Investors and analysts focus on Bitcoin’s key levels at $100,000 and $105,000. This event points to potential shifts in global financial dynamics .