For Morgan Stanley, the cryptocurrency markets are weakening

Cryptocurrency markets are now weakening as the US Federal Reserve and other central banks try to slow their expansion and are trying to prepare markets for interest rate hikes, Morgan Stanley head of cryptocurrency research Sheena wrote. Shah, in a report released last week. Retail investor sentiment on social media has also started to turn less bullish since late last year, with the recent downward momentum in prices also contributing to bearish sentiment, the bank said.

Morgan Stanley notes that bitcoin's market capitalization has tracked growth in the global money supply since late 2013. The annual change in the money supply peaked in February 2021, while bitcoin's annual growth rate peaked in February 2021. peaked a month later, in March, which the bank doesn't see as coincidence. The use of cryptocurrency as a means of payment / exchange of value is what should guide its long-term evaluation. However, the market has traded most cryptocurrencies as speculative risk assets, as evidenced by the correlation between bitcoin and equity markets over the past six months, the report said. Blockchain analyst firm IntoTheBlock said last week that bitcoin's correlation with the M1 money supply rose to 0.77, suggesting a strong statistical relationship between the two.

by Alessandro Crea Thursday 20 January 2022 14:00 CREATES ARTICLE