Bitcoin,Gold May Surge as US Credit Rating Downgraded

International journalist Michelle Makori has highlighted the potential for Bitcoin and gold to surge in value following the downgrade of the U.S. credit rating from AAA to AA1 by Moody’s agency. The downgrade was attributed to rising debt and interest rates that are significantly higher than similarly rated sovereigns. The U.S. national debt currently stands at $36.2 trillion, and recent legislative actions, such as the blocking of a bill to extend tax cuts, have contributed to the growing fiscal deficit, which now stands at $1.05 trillion. Makori believes that this economic uncertainty provides a favorable environment for safe-haven assets like Bitcoin and gold to increase in price.

According to Makori, the U.S. now shares a credit rating with Austria and Finland, underscoring the severity of the situation. She emphasized that hard assets, such as gold and Bitcoin, do not lie and are worth watching closely. This sentiment is echoed by major crypto analyst Michael van de Poppe from the Netherlands, who believes that Bitcoin is currently in a healthy consolidation phase, targeting a new all-time high in the coming weeks. Despite the recent trade tariff pause negotiated between the U.S. and China, markets remain within striking distance of all-time highs, with Bitcoin trading at $103,502, slightly below its January all-time high of $109,026.02. Similarly, gold is trading at $3,196.80 per ounce, almost 10% below its all-time high of $3,509.90 reached on April 22.

The correlation between stock markets and crypto has been highlighted by an on-chain data aggregator, which noted that despite the trade tariff pause, markets remain volatile. The S&P 500 is currently trading at $5,953.57, staying 3.27% below its all-time high of $6,147.43. This economic uncertainty and the potential for further downgrades in the U.S. credit rating could provide a catalyst for Bitcoin and gold to surge in value, as investors seek safe-haven assets in times of economic turmoil. The current fiscal deficit and interest burden in the U.S. are significantly higher than peer nations, further exacerbating the situation and providing a favorable environment for Bitcoin and gold to increase in price.