by Coinstrooper Crypto Articles
Quick Take
  • A cryptocurrency market crash is now one of the most likely economic shocks over the next 12 to 18 months, according to Moody’s Analytics.
  • Its latest risk matrix, shared by chief economist Mark Zandi on Monday, compares 27 potential shocks by their likelihood and economic impact.
  • A crypto market crash sits near the top of the probability scale.
  • However, Moody’s considers its likely damage to the wider economy relatively limited.

What Happened

The warning comes just two days before the Federal Reserve’s October 28 interest rate decision, as investors face mounting uncertainty over inflation and financial markets.

Still, the warning comes as high borrowing costs threaten speculative investments.

For crypto investors, Wednesday’s decision offers a critical test. Holding rates could provide temporary relief, although persistent inflation and further tightening later this year remain significant threats.

Market Context

A cryptocurrency market crash is now one of the most likely economic shocks over the next 12 to 18 months, according to Moody’s Analytics.

A crypto market crash sits near the top of the probability scale. However, Moody’s considers its likely damage to the wider economy relatively limited.

The matrix provides no specific crash probability or price forecast.

A deeper stock market selloff could pressure crypto prices further, while leveraged positions risk accelerating losses through forced liquidations.

Four Bigger Threats Could Shake Global Markets

Moody’s identifies four worsening risks: an AI stock selloff, an escalating Iran war, bond market turmoil and Federal Reserve policy mistakes.

Bond markets are already showing strain. The US 10-year Treasury yield recently reached 5.31% before retreating toward 4.99% on Monday.

Why It Matters

Why Moody’s Sees a Crypto Crash as a Major Risk

Moody’s Analytics, the economic research division of global financial firm Moody’s, assesses threats using economic data, forecasting models and expert analysis.

Its latest risk matrix, shared by chief economist Mark Zandi on Monday, compares 27 potential shocks by their likelihood and economic impact.

Zandi believes further monetary tightening could worsen the situation.

The post Moody’s Warns Crypto Crash Is Among the Most Likely Economic Risks appeared first on BeInCrypto.

Details

These threats carry potentially greater economic consequences than a crypto crash.

“The Fed won’t raise interest rates again when it meets this week, and it shouldn’t,” he wrote.

The Fed raised rates in September to 3.75%–4%, while inflation remains elevated.

Yet traders now assign just a 10.5% probability to another October hike, according to CME FedWatch.