Bitcoin Set for Big Breakout as US Loses AAA Credit Rating: Safe-haven Money Flows to Hard Assets
With the US downgraded from AAA to AA1 by Moody’s, financial experts are warning of a new period of economic uncertainty – and are expecting Bitcoin and gold to benefit as top safe-haven assets.
According to international journalist Michelle Makori, this is the time for investors to keep a close eye on these two assets. “Watch Bitcoin and gold,” she emphasized, referring to the severe financial turmoil in the US, with the national debt exceeding $36.2 trillion and the current fiscal deficit reaching $1.05 trillion.
Rising debt, interest costs weigh on economy
Moody’s cited the downgrade as the US’s interest costs are “significantly higher than those of its peers”, with the 10-year bond yield currently at 4.48%. In addition, the US Congress recently rejected former President Trump’s proposal to extend the tax cuts from his previous term – a move that could cause the public debt to continue to swell in the next decade.
“The US now shares the same credit rating as Austria and Finland. In that context, gold and Bitcoin – hard assets – become the top defensive options,” Makori said.
Is the market accumulating before a big boost?
Despite recent global policy and trade turmoil, Bitcoin has yet to return to its all-time high, currently trading at around $103,502 – 5.33% lower than its peak of $109,026 in January 2025. Meanwhile, gold is also correcting to $3,196.80 per ounce, nearly 10% lower than its peak of $3,509.90 set in late April.
Data from Santiment shows that the stock market and digital assets are entering a consolidation phase together. The S&P 500 is currently trading at 5,953 points, down 3.27% from its all-time high.
However, according to analyst Michael van de Poppe, Bitcoin is “calmly accumulating” and could soon make a breakout. “We are witnessing the calm before the storm. The possibility of Bitcoin reaching a new high in the next few weeks is completely reasonable,” he commented.
Hard assets – a survival option in times of uncertainty
In the context of the US credit rating declining, public debt and heavy borrowing costs, confidence in the USD is being questioned. This is creating a shift in capital flows from traditional assets to assets with limited supply such as Bitcoin and gold.
Not only a means of shelter, Bitcoin is increasingly seen as a “global store of value” in the eyes of institutional investors, especially when the traditional financial system is facing many unprecedented challenges.
With the current situation, many experts agree that: the time for Bitcoin to break out can come at any time.