A crypto market crash is now among the most likely economic shocks of the next 12 to 18 months, according to Moody's Analytics. Chief economist Mark Zandi shared the firm's latest risk matrix
A crypto market crash is now among the most likely economic shocks of the next 12 to 18 months, according to Moody's Analytics.
Chief economist Mark Zandi shared the firm's latest risk matrix on X, just two days before the Federal Reserve announces its Oct, 28 rate decision.
“The Fed won’t raise interest rates again when it meets this week, and it shouldn’t. The economy is threatened by a growing list of risks, and a Fed misstep is one of them,” Zandi wrote in his post.
The matrix ranks 27 potential shocks by how likely they are and how much damage they would do.
A crypto crash sits near the top of the probability scale, though Moody's sees its hit to the wider economy as relatively limited.
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It offers no crash probability or price forecast. Still, high borrowing costs weigh on speculative assets, and a deeper stock selloff could add pressure.
Source: Moody's AnalyticsLeveraged positions could speed up losses through forced liquidations. "There's a lot of red in the matrix," Zandi wrote, pointing to risks becoming more likely or more severe.
Four bigger threats are worsening: an AI stock selloff, an escalating Iran war, bond market turmoil and Fed policy mistakes.
As per data, the 10-year Treasury yield recently touched 5.31% before easing toward 4.99%. The Fed raised rates in Sept to 3.75%–4%, with inflation still elevated.
“Unless rates recede soon, this will do real damage. Bond investors are already doing the Fed’s work for it,” Zandi wrote.
Traders agree for now, giving another increase in October just a 10.5% chance, per CME FedWatch report.
For crypto investors, a pause could bring temporary relief, though stubborn inflation and tightening later this year remain threats.
Wednesday's decision is the first real test of that view, and Bitcoin holders will be watching closely.
If you follow our market coverage, don’t miss the Roundtable 100. Updated every Friday, it's a power ranking of the 100 most investable tech stocks, including digital assets. Check out the latest RTB 100 rankings at roundtable100.com.
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