Did Moody's Just Pump Bitcoin?
Bitcoin has surged to its highest price since January on the back of Moody's downgrade of U.S. federal debt.
The price of Bitcoin (CRYPTO: BTC) topped $106,000 on Monday as investors reacted to Moody's (NYSE: MCO) decision to downgrade the credit rating of the U.S. government from Aaa to Aa1. Moody's was the last of the big three credit rating companies to strip the U.S. of its highest grade. It said, among other things, that it expected larger deficits to drive the government's debt burden up during the next decade.
The announcement spurred Bitcoin to its highest level since January and brought it close to its all-time high of about $109,000. Although Bitcoin's price is up, it does Moody's a disservice to call what it did a pump for Bitcoin because the word is usually associated with pump-and-dump scams. I'm sure that the jump in crypto prices that resulted from the ratings company's action was a side effect rather than a deliberate ploy.
Even so, it raises questions of how much of a hedge Bitcoin can be against a weakening dollar and how likely a dollar crisis might be.
