• Morgan Stanley has said that a large stock crash could occur soon and bring down the prices of crypto assets.
• Citi researchers have noted that there is now less correlation between stocks and crypto, so even if stocks drop, crypto may remain safe.
• Some analysts also point to improving macroeconomic factors this year which may help bolster crypto further.
Morgan Stanley Predicts Rocky Period for BTC and Crypto
Morgan Stanley recently warned investors of a potential stock crash in March which could lead to a decrease in the prices of various forms of cryptocurrency such as Bitcoin. This comes after Bitcoin had hit a new six-month high, with some industry heads predicting an even higher price for BTC in the future. However, despite these positive sentiments, there is still uncertainty on how exactly the market will move forward in 2023.
Decrease in Correlation Between Stocks and Crypto
Citi researchers have pointed out that recently there has been less correlation between stocks and cryptocurrencies, meaning that even if stocks do indeed plummet this month as predicted by Morgan Stanley, it’s possible that cryptocurrencies such as Bitcoin may remain relatively unscathed. This could be due to several other factors such as reduced inflation and less aggressive interest rate hikes that are expected to come about this year which could possibly help bolster cryptocurrencies even further.
Previous Year’s Performance
The previous year (2022) was not particularly successful for many digital assets; Bitcoin fell from an all-time high of $68K per unit at the beginning of 2022 to only $16,600 at the end of it – partly attributed to major falls like FTX crash as well as numerous bankruptcies throughout the year which led to a loss of over $2 trillion in overall valuation within the space.
Positive Sentiments Despite Warnings
Despite warnings from Morgan Stanley about a potential stock crash this month bringing down cryptocurrency prices with it, many industry experts remain optimistic about 2023 being a bullish year for digital assets like Bitcoin with some suggesting an unimaginable price increase up beyond $250K per unit by the end of 2023.
Overall, while Morgan Stanley has predicted a rocky period for various cryptocurrency prices in March due to possible stock crashes occurring soon, other analysts suggest that there are still elements – such as reduced inflation or less aggressive interest rates – which could help bolster these digital assets even further during 2023 regardless if stocks fall or not.