US credit rating fallen: What does this mean for Bitcoin and Co.?

US credit rating fallen: What does this mean for Bitcoin and Co.?

Moody’s has downgraded the US’s long-term credit rating from “Aaa” to “Aa1”. This marks the first downgrade from this rating agency and follows similar moves from S&P and Fitch. Moody's decision, which comes amid rising deficits and a growing interest burden, also drew backlash from U.S. Treasury Secretary Scott Bessent, who criticized it as a lagging indicator. The U.S. national debt is currently $36.87 trillion, while the annual budget deficit is approaching $2 trillion.

What's particularly notable is that the downgrade could reinvigorate discussion about the U.S.'s financial outlook and the role of digital currencies. While Donald Trump promised a drastic reduction in debt during his election campaign, new debt in his first term in office (2017-2021) was already $7.8 trillion. Joe Biden exceeded this figure from 2021 to 2025 with new debt of $8.4 trillion.

Financial markets and impact on Bitcoin

The downgrade could increase the cost for Trump II to raise money through Treasury bonds. Despite these developments, the impact on the financial markets remains moderate as many regulators do not differentiate between ratings Aaa and Aa1. Analysts say the slight rise in Treasury yields suggests declining confidence in the U.S. as a “risk-free” asset class.

Bitcoin is currently trading above $100,000 and is showing remarkable stability. Experts interpret this development as an indication of a changing role for cryptocurrency, particularly as a possible hedge against government risks. This could also have a long-term positive impact on Bitcoin and other crypto assets, especially if the Federal Reserve considers easing monetary policy.

The future of government finances and crypto markets

Moody's warns that without significant reforms, US deficit budgets could rise to 9% of GDP by 2035, compared to the current 6.4%. In this context, the downgrade could not only fuel the discussion about decentralized assets, but also reinforce the role of digital currencies like Bitcoin as an alternative form of investment in times of economic uncertainty. The information that many markets remained mostly stable could indicate that investors have already adapted to the new circumstances.

Overall, the current economic climate could open up new prospects for crypto investors and significantly impact the US financial landscape. At a time when traditional financial markets are facing challenges, Bitcoin offers a potential refuge, confirming its relevance in the current economic discourse.

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