Moody’s bank downgrade spurs Bitcoin

On Tuesday, cryptocurrencies experienced a widespread increase in contrast to the stock market, driven by Moody’s decision to place the U.S. banking sector on alert.

Bitcoin demonstrated a 2.89% rise, reaching $29,785.88. Notably, the leading cryptocurrency had remained within a 1% fluctuation range for 14 consecutive days until Monday. It’s important to note that the cryptocurrency market operates around the clock.

The movement began early Tuesday morning following Moody’s downgrade of credit ratings for ten U.S. banks and its consideration of potential downgrades for notable institutions such as Bank of New York Mellon, U.S. Bancorp, State Street, and Northern Trust.

Earlier this year, the turmoil in the U.S. banking sector had driven a significant surge in bitcoin’s value as investors rekindled their interest in the cryptocurrency’s potential as an alternative banking system. The volatility in trading bitcoin and ether had substantially decreased in May, following the resolution of the banking crisis, and is now at multi-year lows, as reported by Kaiko.

While major stock market indices experienced declines, equities related to the crypto sector observed gains. Crypto exchange Coinbase saw a 2.42% increase, and Microstrategy, a proxy for bitcoin, recorded a 5.03% gain. A number of mining-related stocks rose by 4% or more.

Bitcoin’s upward movement also had a positive impact on the broader crypto market. Ether witnessed a 2.10% increase, and alternative tokens linked to Ethereum, such as Solana and Polygon, surged by 7.48% and 4.96% respectively. The Uniswap token, associated with the DeFi platform, saw a gain of 4.30%, while the payments token XRP climbed more than 3.49%.