Bitcoin nearing its all-time high, the approaching golden cross suggests a buying signal for the medium to long term.

## Macroeconomics and Financial Markets

The major rating agency Moody's downgraded the U.S. credit rating from its previous highest rank of "AAA" to "AA1" on the 17th. As a result, the United States, the world's largest economy, has lost the highest rating of triple A from all three major rating agencies.

Transition of U.S. Treasury Bond Ratings

• S&P (2011): Inability to respond to the increasing level of government debt.
• Fitch (2023): Chronic fiscal deficits and political infighting.
• Moody's (2025): Sharp rise in debt and interest payment ratio

Moody's cited as the main reason for the downgrade "the significant increase in interest payments on government debt due to rising interest rates, in addition to the expanding fiscal deficit and debt." According to the company's analysis, federal government debt, which is 98% of GDP as of 2024, is expected to balloon to about 134% by 2035.

The background of the downgrade is believed to be strongly influenced by the significant impact of the tariff policies of the Trump administration and concerns over fiscal management. Moody's pointed out as a reason for the downgrade that "if the U.S. economy slows down due to the effects of the global tariff war, there is a risk that the fiscal deficit will further widen with the increase in government spending."

This downgrade could be a "double-edged sword" for the cryptocurrency market.

On one hand, the decline in the reliability of U.S. Treasuries, which have been regarded as the world's largest "safe asset," could be a tailwind for Bitcoin, which does not rely on fiat currencies such as the U.S. dollar. On the other hand, the rise in interest rates due to downgrades and turmoil in financial markets could also exert downward pressure on risk assets like stocks and the cryptocurrency market in the short term.

In the short term, the pressure of a weaker dollar due to the downgrading of US bonds is likely to have a positive effect on the cryptocurrency market.

Due to the depreciation of the dollar, the cost of purchasing cryptocurrencies in other currencies is relatively decreasing, lowering the entry barriers for overseas investors. Additionally, the decreased attractiveness of U.S. Treasury bonds as dollar-denominated assets is contributing to an increase in demand for alternative value preservation methods and inflation hedges.

However, in the medium to long term, the possibility of rising interest rates and turmoil in the financial markets due to downgrades cannot be ignored, as they may exert downward pressure on risk assets. Particularly in the cryptocurrency market, which has a high level of leveraged derivative trading, the tightening of monetary policy could lead to liquidity contraction, posing a risk of sudden fluctuations in the market.

cryptocurrency market

In the cryptocurrency market, Bitcoin (BTC) has risen by +1.8% compared to the previous day, with 1 BTC priced at $104,915.

BTC/USD daily chart

The Bitcoin (BTC) market is currently fluctuating around $105,000 (15.5 million yen), and a golden cross formation is approaching.

The golden cross occurs when the short-term moving average (50-day SMA) crosses above the long-term moving average (200-day SMA) from below, which is an important signal indicating the beginning of a medium to long-term upward trend in technical analysis. It signifies that the market momentum has shifted to the upside.

However, while technical analysis functions as one of the signals, market trends for stocks and cryptocurrencies are significantly influenced by external macroeconomic factors such as large-scale monetary easing policies and tightening after the COVID shock, as well as geopolitical risks due to wars.

Bitcoin ETF continues strong capital inflows in May.

As the inflow of funds into Bitcoin spot ETFs continues, trade friction and inflation concerns are bringing new trends to the digital asset market.

According to the latest data from SoSoValue, the U.S. spot Bitcoin ETF recorded over $2.8 billion (approximately 420 billion yen) in net inflows just in the first half of May. Notably, on May 2, it achieved the largest single-day inflow of $674.9 million (approximately 101.2 billion yen). As of May 16, the cumulative inflow reached $41.77 billion (approximately 6.2 trillion yen), and the total net assets surpassed $122 billion (approximately 18.3 trillion yen).

Such strong capital inflows indicate that institutional investors are increasingly entering the cryptocurrency market.

The FRB (Federal Reserve Board) has kept the policy interest rate at 4.25% to 4.50% and maintains a cautious stance. Chairman Powell stated that "we are prepared to respond to changing data," but did not indicate any imminent policy shift.

The background to this is the resurgence of inflation concerns brought about by the highly uncertain trade and tariff policies of the Trump administration. Although the United States and China have agreed to a 90-day temporary reduction in tariffs, high tariffs are still imposed in many areas, including electric vehicles and semiconductors.

Major U.S. retailers such as Walmart are planning price increases due to the impact of tariffs, and Walmart's CFO expressed concern, stating that "the scale and speed of these price increases are unprecedented in history." In this situation, the appeal of Bitcoin as an inflation hedge may be reassessed.

Bitcoin (BTC) news and prices

BTC Exchange Comparison | Fees, Spreads, Accumulation, Lending Coins

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