The U.S. lost its perfect credit rating on Friday after rating agency Moody’s downgraded U.S. debt from “Aaa” to “Aa1,” citing concerns about the country’s ballooning $36.87 trillion sovereign debt, according to a release published by the firm.

Stocks fell on Monday, with the S&P 500 shedding 0.13%, the Nasdaq easing 0.31%, and the Dow squeaking out a small gain of 0.19% at the time of reporting, according to Yahoo Finance. Coinmarketcap data shows that crypto markets were also down 1.87%, with bitcoin losing 0.48% even as it reclaimed $105K after a choppy weekend that at one time, saw the cryptocurrency shed $5,000 in just 5 hours.

Moody’s was the last of the “Big Three” credit rating agencies to downgrade U.S. debt. The other two, Standard & Poor’s and Fitch, both cut their ratings in 2011 and 2023, respectively. Moody’s demotion sent bond prices tumbling on Monday, and yields jumped as a result. The 30-year treasury yield topped 5% before easing to 4.9% at the time of reporting. Bond yields influence consumer borrowing costs, and Friday’s downgrade could mean higher interest rates on retail products such as car loans and mortgages.

(The U.S. 30-year treasury bond yield rose past 5% after Moody’s downgrade / CNBC)

Bitcoin’s seven-day price appreciation may be a sign that investors are betting on the cryptocurrency and abandoning the U.S. dollar, as the government will likely be forced to print more money to pay off its ever-increasing debt.

“You should know that credit ratings understate credit risks because they only rate the risk of the government not paying its debt,” said billionaire hedge fund founder Ray Dalio in a Linkedin post. “They don’t include the greater risk that the countries in debt will print money to pay their debts thus causing holders of the bonds to suffer losses from the decreased value of the money they’re getting.”

(Billionaire hedge fund founder Ray Dalio / Bridgewater Associates)

Bitcoin is back above the $105,000 mark despite a slight 0.48% pullback over the past 24 hours, currently trading at $105,166.72, according to Coinmarketcap. The cryptocurrency saw intraday price movement between $102,112.69 and $107,068.72, extending its weekly gains to 2.10%. The latest dip appears to be a mild cooldown after recent upward momentum.

( BTC price / Trading View)

Trading volume surged to $68.01 billion, a 68.72% increase from the previous day, largely attributed to the typical post-weekend boost in market activity. Bitcoin’s market capitalization dipped slightly by 0.54% to $2.08 trillion, reflecting today’s small price decline. BTC dominance remained steady, rising just 0.01% to 63.87%, and has stayed mostly balanced relative to the broader crypto market.

( BTC dominance / Trading View)

In the derivatives space, total BTC futures open interest climbed 0.96% to $71.45 billion, signaling sustained investor engagement. Liquidation data from Coinglass showed that bears bore the brunt of the recent market action, with short positions accounting for $5.70 million of the $6.12 million in total liquidations while longs lost a much smaller $417,220.

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