ETH, DOGE, XRP Down 3% as Moody’s Downgrades U.S. Credit Rating

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Crypto markets slipped alongside stocks after Moody’s cut the U.S. sovereign credit score to Aa1, triggering risk-off sentiment and fresh concerns over government debt and macro stability.

Updated May 17, 2025, 7:57 a.m. Published May 17, 2025, 7:54 a.m.

What to know:

Major cryptocurrencies, including ether, XRP, and dogecoin, fell about 3% after Moody's downgraded the U.S. credit rating.
Moody's cut the U.S. sovereign credit rating to Aa1 from Aaa, citing rising deficits and interest expenses.
The U.S. Treasury yields rose and S&P 500 futures dipped following the downgrade, impacting both traditional and crypto markets.

Major tokens slumped Saturday as investors digested the implications of Moody’s Ratings downgrading the U.S. credit score, with ether (ETH), XRP, and dogecoin (DOGE) dropping roughly 3%.

The broader crypto market held at $3.3 trillion, paring earlier gains after briefly touching the week’s high.

The move came after rating giant Moody’s cut the U.S. sovereign credit rating to Aa1 from Aaa, citing the country’s swelling deficits, rising interest expenses, and a lack of political will to rein in spending.

The firm now joins Fitch and S&P in assigning a rating below the once-unblemished triple-A status long held by the world’s largest economy.

As such, the White House was quick to respond, with spokespersons for President Donald Trump criticizing the decision as politically motivated.

The downgrade had an immediate effect on traditional markets: U.S. Treasury yields jumped, with the 10-year note rising to 4.49%, while S&P 500 futures dipped 0.6% in after-hours trading.

Historically, concerns about U.S. debt sustainability and dollar debasement have served as tailwinds for bitcoin and other decentralized assets. However, credit downgrades can also trigger short-term risk-off behavior, particularly if macro uncertainty leads institutional traders to reduce exposure.

Meanwhile, some traders warned of a deeper sell-off in the near term on general profit-taking before the next rally.
“Bitcoin is holding the $104,000 mark as a key level and the positive factor is that sellers have not yet managed to seize control of the market,” Alex Kuptsikevich, the FxPro chief market analyst, told CoinDesk in an email. “However, resilience at high levels may be temporary before the next bounce, and there is considerable pressure near the upper boundary of the current range.”
“In other words, the short-term outlook suggests a decline from current levels,” Kuptsikevich opined.

Shaurya Malwa

Shaurya is the Co-Leader of the CoinDesk tokens and data team in Asia with a focus on crypto derivatives, DeFi, market microstructure, and protocol analysis.

Shaurya holds over $1,000 in BTC, ETH, SOL, AVAX, SUSHI, CRV, NEAR, YFI, YFII, SHIB, DOGE, USDT, USDC, BNB, MANA, MLN, LINK, XMR, ALGO, VET, CAKE, AAVE, COMP, ROOK, TRX, SNX, RUNE, FTM, ZIL, KSM, ENJ, CKB, JOE, GHST, PERP, BTRFLY, OHM, BANANA, ROME, BURGER, SPIRIT, and ORCA.

He provides over $1,000 to liquidity pools on Compound, Curve, SushiSwap, PancakeSwap, BurgerSwap, Orca, AnySwap, SpiritSwap, Rook Protocol, Yearn Finance, Synthetix, Harvest, Redacted Cartel, OlympusDAO, Rome, Trader Joe, and SUN.