Fitch cuts the US credit rating from AAA to AA+ - good for Bitcoin?
Fitch has cut the US credit rating from AAA to AA+. They appear to be concerned at how quickly the current US budget deficit surged after the debt ceiling got lifted. It's now over $1 trillion, and the Biden administration has no plans to get it down via either tax rises or spending cuts.
The last time something like this happened was in 2011. The S&P announced a negative outlook on the AAA rating in April 2011 during the debt ceiling stand-off, when parts of the US government shut down due to running out of money.
Four days after Congress voted to raise the debt ceiling on August 2nd 2011, the S&P followed through and cut the rating to AA+ (where they've kept it ever since), saying the debacle had undermined confidence in the US.
This is what happened to bitcoin during this period:
The main surge in price happened during the US government shutdown, but even after things got resolved, the price never went back to it's pre-shutdown levels. People had learned that the US govt, which had been stable for so long, was beginning to crack. When the Cyprus crisis happened in 2013, a large number of people were already primed to think of bitcoin as a safe haven.
Now that Fitch has joined the S&P in awarding the USA an AA+ rating, only Moodys remains with an AAA rating.