Moody’s Lists Crypto Crash Among Top Economic Threats

A crypto market crash ranks as one of the economy’s most likely shocks over the next 12 to 18 months, says Moody’s Analytics.

The caution lands only two days before the Federal Reserve’s October 28 rate decision, as mounting uncertainty over inflation and financial markets weighs on investors.

Why a Crypto Collapse Ranks High on Moody’s List

Moody’s Analytics, the economic research arm of global financial firm Moody’s, gauges threats with economic data, forecasting models and expert input.

Chief economist Mark Zandi shared the latest risk matrix on Monday, a comparison of 27 possible shocks based on how likely they are and how much economic damage they could inflict.

A crypto market decline sits close to the top of the probability rankings. Moody’s nonetheless views the broader economic harm from such an event as fairly contained.

The matrix does not spell out a precise crash probability or a price forecast.

Still, the warning surfaces while high borrowing costs are pressuring speculative investments.

Further weakness in stock markets could add downward pressure on crypto prices, while leveraged positions might accelerate losses through forced liquidations.

Four Greater Threats That Could Hit Global Markets

Moody’s points to four risks that are deteriorating: a selloff in AI stocks, an escalating Iran war, bond market turmoil and policy errors by the Federal Reserve.

Those four threats could have bigger economic consequences than a crypto crash.

Bond markets are already under stress, with the US 10-year Treasury yield hitting 5.31% recently before easing back toward 4.99% on Monday.

More tightening, Zandi believes, could aggravate matters.

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

The Fed lifted rates in September to 3.75%–4%, with inflation still elevated.

Traders still see only a 10.5% chance of another October hike, according to CME FedWatch.

Wednesday’s decision is a crucial test for crypto investors. Keeping rates steady might bring short-term relief, but persistent inflation and additional tightening later this year remain major risks.