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In a concerning development for the world’s largest economy, Moody’s Ratings downgraded the United States’ sovereign credit rating from Aaa to Aa1 on Friday, erasing the nation’s last bastion of top-tier fiscal credibility.

The decision, announced as markets closed Friday, completes a trifecta of downgrades among major rating agencies, following Standard & Poor’s in 2011 and Fitch Ratings in 2023. With a $36 trillion federal debt casting a long shadow, Moody’s pointed to a perilous combination of soaring interest costs, ballooning entitlement programs, and a Congress paralyzed by partisan rancor.

“The United States retains exceptional credit strengths,” Moody’s acknowledged, citing “the size, resilience, and dynamism of its economy and the role of the U.S. dollar as global reserve currency.”

However, these advantages are no match for the fiscal storm brewing. The agency forecasts federal deficits surging to nearly 9% of GDP by 2035, up from 6.4% in 2024, fueled by “increased interest payments on debt, rising entitlement spending, and relatively low revenue generation.” The debt-to-GDP ratio, already at 98% last year, is projected to hit 134% by 2035, a trajectory Moody’s deems unsustainable.

The downgrade landed like a thunderclap in a capital already reeling from political turmoil. Hours earlier, House Republicans watched their flagship tax and spending package, the “One Big Beautiful Bill Act,” implode in the Budget Committee. The 16-21 vote exposed fractures within the GOP and hardened Democratic opposition, offering a vivid snapshot of the gridlock Moody’s warned about.

The bill, a linchpin of President Donald Trump’s economic agenda, sought to cement the 2017 tax cuts, exempt tips, overtime, and certain auto loans from taxation, and raise the standard deduction to $32,000 for joint filers. It also dangled a temporary $500 hike to the child tax credit, bringing it to $2,500, while funneling $350 billion toward deportation efforts and Pentagon priorities.

But the package’s aggressive spending cuts, slashing over $1 trillion from health care and food assistance over a decade, ignited controversy. Proposed work requirements for Medicaid, demanding 80 hours of monthly work, and expanded SNAP restrictions for ages 55 to 64 drew fierce pushback.

Five GOP rebels, led by Reps. Chip Roy of Texas and Ralph Norman of South Carolina joined Democrats to sink the bill, demanding steeper Medicaid reductions, immediate welfare reforms, and the axing of Biden-era green energy tax credits. New York Republicans, meanwhile, clamored for a beefier State and Local Tax deduction, pitching $62,000 for single filers and $124,000 for joint filers against the bill’s $30,000 cap for joint filers earning up to $400,000.

Democrats pounced, branding the legislation a betrayal of the vulnerable. “This is one big, beautiful betrayal,” declared Rep. Pramila Jayapal, a progressive firebrand.

Rep. Morgan McGarvey of Kentucky warned of shuttered nursing homes, shuttered hospitals, and hungry children, citing Congressional Budget Office estimates that the bill would strip health insurance from 7.6 million people and cut 3 million monthly SNAP recipients. The defeat, played out in real-time on Capitol Hill, laid bare the dysfunction Moody’s flagged as a central driver of the downgrade.

Moody’s didn’t mince words about the fiscal fallout of current policies. Extending the 2017 Trump tax cuts, a top Republican goal, would pile an additional $4 trillion onto the primary deficit over the next decade, excluding interest, the agency calculated. This, coupled with reluctance from Republicans to raise taxes and Democrats’ resistance to spending cuts, has left Washington “unable to tackle America’s huge deficits,” as the Associated Press reported.

The downgrade threatens to jack up borrowing costs for the government, potentially rippling through to consumers grappling with mortgages, car loans, and credit card debt.

“This downgrade is part of a long trend of fiscal irresponsibility,” warned Spencer Hakimian, CEO of Tolou Capital Management, predicting higher costs for both public and private sectors.

Jay Hatfield, CEO of Infrastructure Capital Advisors, foresaw market jitters, especially as Trump’s tariff policies—already stirring fears of inflation and slowdown—compound vulnerabilities. Still, Hakimian noted that the U.S. dollar’s safe-haven status might cap spikes in Treasury yields.

Moody’s maintained a stable outlook, a nod to the U.S.’s economic heft and the dollar’s global dominance. But the warning signs are unmistakable.

“This downgrade adds to the evidence that the U.S. has too much debt,” said Darrell Duffie, a Stanford finance professor and former Moody’s board member. “Congress needs to either get more revenues or spend less.”

The announcement sparked a flurry of reactions, each tinged with political spin. Stephen Moore, a Heritage Foundation economist and former Trump advisor, decried the downgrade as “outrageous,” asking, “If U.S. government bonds aren’t a triple-A asset, then what is?”

White House communications director Steven Cheung took a swipe at Moody’s economist Mark Zandi, hinting at partisan motives. Senate Democratic Leader Chuck Schumer called it a “wake-up call” for Republicans to ditch their “deficit-busting tax giveaway,” adding dryly, “I’m not holding my breath.”

Moody’s verdict underlines a warning by economists that without a course correction, America’s debt burden risks becoming an anchor, dragging down an economy still buoyed by its global clout but increasingly tested by its own divisions.

The Saudi Central Bank reportedly disclosed an investment in MicroStrategy ($MSTR) stock, with posts on X claiming a purchase of 25,656 shares. Given MicroStrategy’s significant Bitcoin holdings, this move is widely interpreted as indirect exposure to Bitcoin. The investment aligns with growing institutional interest in crypto but has sparked debate, with some viewing it as a strategic diversification and others as a risky bet with public funds.

The Central Bank of Russia has reported Bitcoin as the top-performing investment asset in 2025, with a 38% return over the past 12 months, outperforming traditional assets like gold, stocks, and bonds. Since 2022, Bitcoin’s cumulative return has reached 121.3%. Its year-to-date performance in 2025 shows a 17.6% return, and in April 2025 alone, it gained 11.2%. This recognition marks a shift in Russia’s stance, as the Central Bank has also included Bitcoin in its financial overview and plans to launch a crypto exchange for qualified investors. However, Bitcoin’s volatility remains notable, with a reported 17.6% drop in Q1 2025.

The Economist published an article on May 17, 2025, titled “Crypto meets the swamp: Why it won’t end well,” labeling cryptocurrency as the “ultimate swamp asset.” It argues that the U.S. crypto industry has shifted from its decentralized ideals to a tool for rent-seeking, particularly benefiting political figures like Donald Trump and his associates. The piece criticizes crypto for facilitating fraud, money-laundering, and financial crime on a large scale, deviating from its original promise of financial freedom.

Abu Dhabi’s sovereign wealth fund, Mubadala Investment Company, disclosed a $408.5 million investment in BlackRock’s iShares Bitcoin Trust (IBIT) ETF, as per a 13F filing with the SEC. This stake, comprising 8.7 million shares as of March 31, 2025, positions Mubadala as one of the largest holders of IBIT, reflecting growing institutional adoption of cryptocurrency. Some reports suggest the investment may have increased to around $461 million, elevating Mubadala to the seventh-largest IBIT holder. This move signals a significant shift, as sovereign wealth funds rarely invest directly in crypto assets, potentially influencing broader market confidence.

The next FTX distribution of over $5 billion to eligible creditors is scheduled to begin on May 30, 2025. Payments will be processed through BitGo or Kraken, with funds expected to reach creditors within 1 to 3 business days. The Ethereum Foundation announced the “Trillion Dollar Security” (1TS) initiative on May 14, 2025, aiming to enhance Ethereum’s security infrastructure to support trillions in onchain assets. The initiative focuses on improving wallet safety, securing smart contracts, enhancing user experience (UX), and strengthening protocol layers.

Key features include smart accounts (ERC-4337), social recovery, spending limits, and advanced key management like MPC and biometrics. This ecosystem-wide effort seeks to boost trust and enable secure mass adoption for both individual and institutional users, positioning Ethereum as a robust global digital asset management platform.

JPMorgan Chase has completed its first public blockchain transaction, settling tokenized U.S. Treasuries outside its private network. The transaction, facilitated by Ondo Finance and leveraging Chainlink’s interoperability technology, marks a significant step for the bank, which has traditionally relied on its private blockchain, Kinexys Digital Payments (formerly JPM Coin). The settlement involved a cross-chain transfer of tokenized short-term Treasuries on Ondo’s public ledger, demonstrating JPMorgan’s move toward integrating with public blockchain infrastructure. This development is seen as a milestone in bridging traditional finance (TradFi) with decentralized finance (DeFi), with potential implications for tokenized real-world assets (RWAs).

Mastercard has partnered with MoonPay to launch stablecoin payment cards, enabling users to spend cryptocurrencies like USDC, USDT, and DAI at over 150 million merchants worldwide. The service converts stablecoins to fiat at the point of sale, powered by MoonPay’s Iron infrastructure.

This expands Mastercard’s crypto push, competing with Visa, despite regulatory uncertainties. The rollout follows Mastercard’s earlier stablecoin payment capabilities announced in April 2025, involving partners like Circle, Nuvei, and Paxos for merchant settlements.

Doodles, a next-generation entertainment company, launched Take Your Medicine, a London-based creative music studio and label, last week. The studio specializes in original music and sound for commercial recording, bridging the gap between commercial and artistic worlds. It has already worked with major brands like Coca-Cola, Samsung, Adidas, Disney, and TikTok, with an EP in development. This follows Doodles’ earlier launch of a namesake record label in July 2024, featuring artists like Lil Wayne and Lil Yachty.

The Infinite Node Foundation (NODE), a nonprofit focused on preserving digital art, acquired the intellectual property (IP) of the CryptoPunks NFT collection from Yuga Labs on May 13, 2025. Yuga Labs, which had purchased the IP from Larva Labs in 2022, transferred it to NODE for an estimated $20 million, though some sources note the amount was undisclosed.

NODE also received a $25 million fund to support its stewardship, which includes preserving the collection, engaging the community, and launching a museum-partnership program to integrate CryptoPunks into leading art institutions.

The acquisition led to a 40% surge in CryptoPunks NFT sales and a 170% increase in trading volume to $2.8 million within 24 hours. Yuga Labs described the transfer as a “full-circle moment” to ensure the collection’s permanence, with Larva Labs founders Matt Hall and John Watkinson returning as advisors.

The Uniswap DAO is currently voting on a proposal to fund the integration of Uniswap V4 on Ethereum and add Unichain support within the Oku platform. This initiative, proposed by GFX Labs, aims to enhance Uniswap’s reach and encourage liquidity migration to Uniswap V4, solidifying its position as a leading decentralized exchange. The proposal includes funding for GFX Labs to integrate these features, develop analytics, and build liquidity tools on Oku. Voting is ongoing and set to conclude on May 18, 2025.