{"id":43418,"date":"2023-08-02T06:31:18","date_gmt":"2023-08-02T10:31:18","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/bitcoin-rises-on-u-s-credit-downgrade-2-reasons-its-a-good-sign-for-crypto\/"},"modified":"2023-08-02T06:31:19","modified_gmt":"2023-08-02T10:31:19","slug":"bitcoin-rises-on-u-s-credit-downgrade-2-reasons-its-a-good-sign-for-crypto","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=43418","title":{"rendered":"Bitcoin Rises on U.S. Credit Downgrade. 2 Reasons It\u2019s a Good Sign for Crypto."},"content":{"rendered":"
\n
<\/p>\n
<\/p>\n<\/figure><\/div>\n

\n Bitcoin
\n and other cryptocurrencies advanced on Wednesday, bucking declines across stocks after Fitch Ratings downgraded the U.S. in a shock move. The market reaction bodes well for cryptos for two reasons.<\/p>\n

The price of
\n Bitcoin
\n has gained 2% over the past 24 hours to near $29,500, with the largest digital asset getting closer to the bottom end of the $30,000 to $31,000 range that has been a support for months. Bitcoin fell below the psychologically important $30,000 level last week, prompting a deterioration of the technical outlook, so a return above $30,000\u2014which it briefly breached in an early Wednesday spike\u2014is key.<\/p>\n

\n

\u201cThe first cryptocurrency experienced impressive upward momentum, touching $30,000 early Wednesday morning,\u201d said Alex Kuptsikevich, an analyst at broker FX Pro. \u201cThe market\u2019s initial rebound on buying back the most sagging assets was supported by the unexpected news of Fitch downgrading the U.S. long-term rating \u2026 which triggered an impulsive pull into Bitcoin and gold.\u201d<\/p>\n

Fitch lowered its rating to AA+ from AAA late Tuesday in a surprise move that follows the high-profile fight over the debt ceiling earlier this year. Fitch cited \u201cexpected fiscal deterioration\u201d in the coming years among its rationale.<\/p>\n

Cryptos advanced on the back of the credit downgrade\u2014a move that is a good sign for digital assets on two fronts. One is largely theoretical, and linked to Bitcoin\u2019s roots as a decentralized alternative currency: If confidence in the U.S. continues to deteriorate, it could push more people to adopt digital assets.<\/p>\n

\u201cDamage to the central government\u2019s credit could raise demand for decentralized, stateless currency,\u201d said Yuya Hasegawa, an analyst at crypto exchange Bitbank.<\/p>\n

That might be overplaying it a bit, though. While it\u2019s true that Bitcoin rose alongside gold\u2014a historical haven asset, up 0.4% Wednesday to 1,986 an ounce\u2014cryptos tend to move on the back of trends other than highflying principles.<\/p>\n

The market reaction is positive, rather, more so because it shows a departure from the downside link between cryptos and equities. The
\n Dow Jones Industrial Average
\n and
\n S&P 500
\n \u00a0were poised for firm declines on Wednesday.\u00a0<\/p>\n

Stocks have marched higher in recent weeks, while Bitcoin has seen a period of historic stagnation despite risk-sensitive catalysts that should buoy both cryptos and equities. While positive catalysts have failed to do much for digital asset prices of late, Bitcoin has in the past fallen on the back of catalysts negative for stocks. The fact that this hasn\u2019t happened is reassuring that any link remaining between stocks and cryptos isn\u2019t isolated to downside moves.<\/p>\n

Beyond Bitcoin,
\n Ether
\n \u2014the second-largest crypto\u2014rose 1.5% to above $1,850. Smaller cryptos or altcoins were also buoyant, with
\n Cardano
\n and
\n Polygon
\n each up around 1%. Memecoins were more muted, with both
\n Dogecoin
\n and
\n Shiba Inu
\n shedding less than 1%.<\/p>\n

Write to Jack Denton at jack.denton@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Bitcoin and other cryptocurrencies advanced on Wednesday, bucking declines across stocks after Fitch Ratings downgraded the U.S. in a shock move. The market reaction bodes well for cryptos for two reasons. The price of Bitcoin has gained 2% over the past 24 hours to near $29,500, with the largest digital asset getting closer to the […]<\/p>\n","protected":false},"author":1,"featured_media":2307,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-43418","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nBitcoin Rises on U.S. Credit Downgrade. 2 Reasons It\u2019s a Good Sign for Crypto. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Bitcoin and other cryptocurrencies advanced on Wednesday, bucking declines across stocks after Fitch Ratings downgraded the U.S. in a shock move. 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