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.
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.
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, sharedby 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.
Moody’s Risk Matrix
The matrix provides no specific crash probability or price forecast.
Still, the warning comes as high borrowing costs threaten speculative investments.
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.
These threats carry potentially greater economic consequences than a crypto crash.
Bond markets are already showing strain. The US 10-year Treasury yield recently reached 5.31% before retreating toward 4.99% on Monday.
Zandi believes further monetary tightening could worsen the situation.
“The Fed won’t raise interest rates again when it meets this week, and it shouldn’t,” hewrote.
The Fedraised 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 toCME FedWatch.
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.
