Moody’s China Downgrade, SegWit News Drive Bitcoin Price Up

FinTech, Investing, News | May 24, 2017 By:

Bitcoin broke through the $2,400 barrier today, buoyed by the news of an imminent deployment of SegWit and overnight news that Moody’s was downgrading China’s credit rating.

DoubleLine CEO Jeff Gundlach pointed out the parallels in a Twitter comment: “Bitcoin up 100% in under 2 months. Shanghai down almost 10% same timeframe, compared to most global stocks up. Probably not a coincidence!”

Adding to the confluence of news were rumors that the US Securities and Exchange Commission would soon rule on the Winklevoss twins’ appeal of their bid to establish the first US exchange-traded fund.

Moody’s cut China’s credit rating for the first time in three decades, downgrading it from A1 to Aa3, changing its outlook from stable to negative. The firm cited rising debt and the potential for slowing economic growth. Although the markets did not immediately react to the news, the news indicates trouble in the world capital of bitcoin. Observers have already pegged bitcoin’s dramatic rise this month to Asian money pouring into the market, but most cited Japan’s decision to declare cryptocurrency as a form of money.

 The Moody’s statement: “The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows. While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government.”