Moody’s Eyes US Bank Downgrade While Crypto Stays Same — For Now

The bond credit rating firm lowered its outlook for all US banks from “stable” to “negative” and put six on watch for potential rating downgrades

article-image

ID1974/Shutterstock.com modified by Blockworks

share

Moody’s Investors Service put the US banking sector on notice amid an ongoing sell-off in US equities spurred by fears of a widespread banking crisis. 

The bond credit rating firm lowered its outlook for all US banks from “stable” to “negative” and put six on watch for potential rating downgrades, including First Republic Bank and UMB Financial. 

Moody’s notes that international contagion is a possibility, especially given the economy’s already precarious situation due to central bank rate decisions. 

“Developing stresses in the US banking system will also weaken investor confidence and heighten funding tensions for European institutions that, as with any bank, by construction combine maturity mismatches with leverage,” Moody’s analysts wrote in the report

“These effects are magnified when rates increase faster than expected, which causes some fixed-rate assets to fall in value and liabilities to start repricing upward more quickly than assets roll off and are replaced.”

While equity markets continue to take a beating, crypto has fared better. Bitcoin (BTC) and ether (ETH) were up about 21% and 14%, respectively, in the past week, as of 1:00 pm, ET. The S&P 500 and Nasdaq Composite indexes have lost 3.4% and 2%, respectively. 

Bitcoin and ether did pare some gains Wednesday with both assets dipping into the red during the afternoon in New York. 

Moody’s has not made any updates to crypto-related bond offerings since the Silicon Valley Bank was taken over by the FDIC. 

In its most recent review of Coinbase, Moody’s downgraded the exchange’s corporate family rating and senior unsecured debt offerings and changed its outlook from “stable” to “under review.” 

“Today’s rating action reflects Coinbase’s substantially weakened revenue and cash flow generation capacity due to the challenging conditions in the crypto asset operating environment characterized by steep declines in crypto asset prices and lower customer trading activity,” Moody’s analysts wrote in mid-January. 

“Moody’s expects the company’s profitability to remain challenged despite its 10 January announcement of a reduction in its global workforce of around 950 employees.”

MicroStrategy, on the other hand, has maintained a stable outlook since June 2021. 

Moody’s has kept an eye on the crypto sector in recent years. Earlier this month, the agency referred to some central bank digital currency efforts, such as those underway in Brazil and the UK, as opportunities to reduce risk and “enhance public money usage.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

With $30 million in funding and EverQuest’s creator at the helm, it’s possible, but not guaranteed

article-image

As Satoshi-era wallets saw over $8 billion worth of BTC on the move, Congress is gearing up for “Crypto Week”

article-image

Bitcoin’s runaway success was partly driven by Slashdot

article-image

Blockworks Research data shows that VC spending is back on the rise after a slow May

article-image

After rejecting a bid from the AI cloud-computing startup last year, Core Scientific agreed to be acquired in a deal expected to close by Q4 2025

article-image

Sponsored

Plume’s collaboration with TRON will unlock cross-chain RWA yield for one of the world’s largest blockchain ecosystems