Moody&#8217;s credit rating agency downgraded the credit rating of the United States 
government from Aaa to Aa1, citing the rising national debt as the primary 
driver behind the reduction in creditworthiness.
According to the May 16 announcement from the rating agency, US lawmakers have 
failed to stem annual deficits or reduce spending over the years, leading to a 
growing national debt. The rating agency wrote:
&gt; &#8220;We do not believe that material multi-year reductions in mandatory spending 
&gt; and deficits will result from the current fiscal proposals under 
&gt; consideration. Over the next decade, we expect larger deficits as 
&gt; entitlement spending rises while government revenue remains broadly flat.&#8221;
The credit downgrade is only one degree out of the 21-notch rating scale used 
by the company to assess the credit health of an entity.
_An overview of the US national debt. Source:__US National Debt Clock_
Despite the negative short to medium-term credit outlook, Moody&#8217;s maintained a 
positive outlook on the long-term health of the United States, citing its 
robust economy and the status of the US dollar as the global reserve currency 
as strengths, reflecting &#8220;balanced&#8221; lending risks.
_**Related:**__**Asia &#8216;s wealthy shifting from US dollar to crypto, gold, 
China: UBS**_
## Investors react to Moody&#8217;s US credit revision
Moody&#8217;s announcement drew mixed reactions from investors and market 
participants, leaving many unconvinced by the agency&#8217;s revised outlook.
Gabor Gurbacs, CEO and founder of crypto loyalty rewards company Pointsville, 
cited the rating agency&#8217;s previous credit assessments during times of 
financial stress as unreliable, signaling that the outlook was too optimistic.
&#8220;This is the same Moody&#8217;s that gave Aaa ratings to sub-prime mortgage-backed 
securities that led to the 2007-2008 financial crisis,&#8221; the executive wrote in 
a May 17 X post.
However, macroeconomic investor Jim Bianco argued that the recent Moody&#8217;s 
credit outlook does not reflect a real downgrade in the perception of US 
government creditworthiness and characterized the announcement as a &#8220;nothing 
burger.&#8221;
_Interest rates on the 30-year US Treasury Bond spiked to nearly 5% in May 
2025, signaling reduced long-term investor confidence in US debt. 
Source:__TradingView_
US government debt surpassed $36 trillion in January 2025 and shows no signs 
of slowing, despite recent efforts by Elon Musk and others to reduce federal 
spending and curtail the national debt.
As the debt climbs and investors lose faith in US government securities, bond 
yields will spike, causing the debt service payments to go up, further 
inflating the national debt.
This creates a vicious cycle as the government will have to entice investors 
with ever-greater yields to incentivize them to purchase government debt.
_**Magazine:**__**Elon Musk &#8216;s plan to run government on blockchain faces 
uphill battle**_

Moody's downgrades US credit rating due to rising debt

Following the return above $100,000 in the previous week, Bitcoin has fought 
well to maintain its hold above the six-figure mark in recent days. While the 
flagship cryptocurrency retains its six-figure valuation, there’s still some 
momentum lacking in its price action, as spotlighted by last week’s 
performance. According to recent analysis, the sluggishness and apparent 
indecision in the BTC market can be attributed to significant selling pressure 
in the derivatives market. Interestingly, the latest on-chain data shows that 
the Bitcoin price still has room for additional growth. Options Market Data 
Shows Shift In Trader Sentiment In a May 16 post on the X platform, blockchain 
analytics firm Glassnode shared fresh on-chain insights suggesting a rise in 
bullish sentiment amongst Bitcoin options traders. The relevant indicator here 
is the 1-month 25 Delta Skew, which compares the implied volatility of bullish 
bets (call options) to the bearish bets (put options). Related Reading: 
Bitcoin Next Leg Up Loading? Analyst Says BTC Could Trade Sideways For Two 
Weeks When the 1-month 25 Delta Skew is in the positive territory, it implies 
that puts have higher implied volatility than calls. This trend is often 
associated with a bullish sentiment where traders are more worried about the 
asset price falling and are thus paying a premium for downside protection. On 
the other hand, a negative value for the 1-month 25 Delta Skew indicator 
signals that calls are more expensive than puts. This suggests that traders 
are more willing to bet on the price of Bitcoin moving higher than for 
protection against downside exposure. According to data from Glassnode, the 
1-month 25 Delta Skew metric recently witnessed a drop to around -6.1%. This 
decline, the analytics platform noted, signifies that call options now carry 
higher implied volatility compared to put options. This options market trend 
means that there is now rising bullish sentiment amongst Bitcoin traders, as 
they lean more into betting on the BTC price rising. Glassnode also pointed 
out that this increasing bullish sentiment reflects a risk-on environment, 
where traders and investors are more willing to risk their funds. 
Historically, a negative 25 Delta Skew is a strong bullish sentiment 
indicator, as it usually precedes further appreciation of the Bitcoin price. 
Moreover, current options data not only supports BTC&#8217;s upward movement, but 
could also serve as a positive catalyst for more growth as additional long 
positions enter the market. Bitcoin Price At A Glance As of this writing, the 
price of BTC stands at around $102,800, reflecting an over 1% decline in the 
past 24 hours. Related Reading: JPMorgan Claims Bitcoin Has More Upside 
Potential Than Gold For Q2—Here’s The Breakdown Featured image from iStock, 
chart from TradingView

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Spot bitcoin exchange-traded funds (ETFs) drew $260.27 million in net inflows 
on Friday, May 16, significantly outpacing spot ethereum ETFs, which recorded 
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