Ratings agency Moody’s downgraded 10 US banks on Monday, with negative ratings actions on many more. Bitcoin has broken higher. 27 Banks suffer negative ratings actions Following on from the Fitch ratings agency downgrade of the US from triple A to double A+, the Moody’s rating agency has followed up with downgrades of 10 small and midsize US banks, and put such august banking giants as New York Mellon and US Bancorp under review for possible downgrades. In all, 27 banks received negative ratings actions from Moody’s which is likely to put them under further pressure and scrutiny at a time when the whole banking sector is struggling to keep itself above water after the Federal Reserve felt it had to buy all the bad bond debts, and as the commercial real estate time bomb gets ever closer to exploding. Moody’s included the following in its report on Monday: "To date, stress on US banks has been reflected almost exclusively in funding and interest rate risk related to monetary policy tightening, but a worsening in asset quality will likely come," The report added: "We continue to expect a mild recession in early 2024, and given the funding strains on the US banking sector, there will likely be a tightening of credit conditions and rising loan losses for US banks." Bitcoin impervious to banking woes As the noose around the US banking sector continues tightening, an asset class completely outside of the entire traditional financial system has just broken higher. Bitcoin and cryptocurrencies are perhaps being seen as a tech asset class that has already seen its bear market bottom, and is now ripe for investment. Bitcoin ripped higher on Monday and into Tuesday, climbing from a $28,700 low to as high as $30,200. The price has since returned to confirm the top of a bull flag, and should it hold above, higher prices can certainly follow. Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
