FINANCIAL EARTHQUAKE!
Moody's LOWERS the rating of the US
Is the #Fed shaking and the price of the #bitcoin skyrocketing as a safe haven?
Moody's Ratings has downgraded the sovereign credit rating of the United States by one level, from Aaa (the highest) to Aa1.
The agency cited as reasons the increasing burden of financing the federal government's budget deficit and the rising cost of renewing existing debt amid high interest rates.
The agency explained that the downgrade reflects the increase in public debt ratios and interest payments to levels significantly higher than those of countries with similar ratings over the past decade.
This decision is expected to marginally increase the yield that investors demand for U.S. Treasury debt, signaling greater risk and potentially weakening confidence in purchasing U.S. assets, including stocks.
Moody's downgrade comes in a context where the chairman of the Federal Reserve, Jerome Powell, has warned about the likelihood of higher long-term interest rates due to economic changes and the possibility of more frequent "supply shocks."
Why is it Important for the Crypto Community?
The downgrade of the credit rating of the world's leading economy, combined with the Fed's warnings, has critical implications for the crypto ecosystem.
Safe Haven Narrative for Bitcoin: In times of global economic uncertainty and concerns about sovereign debt, Bitcoin often positions itself as "digital gold" or a safe-haven asset due to its decentralized nature and limited supply. This downgrade could strengthen that narrative.
