Crypto Prices Could Plummet in Rocky 2023: Morgan Stanley
• Morgan Stanley believes that a stock crash could cause the prices of crypto assets to drop.
• Many industry heads, such as Tim Draper, believe the price of Bitcoin will reach far beyond what is expected.
• Analysts from Citi claim the correlation between stocks and crypto has thinned out in recent years.
Morgan Stanley Predicts Rocky Period for BTC and Crypto
The prices of bitcoin and various other forms of crypto have been doing well these past few weeks, with spikes bringing assets like bitcoin to new six-month highs. However, Morgan Stanley is now saying that a massive stock crash could come along soon and bring down the prices of these digital assets.
Bullish Sentiment for 2023
The sentiment for 2023 thus far is that it will be a bullish year; several industry heads such as Tim Draper think that the price of Bitcoin will reach far beyond what anyone thought imaginable suggesting a $250K price for BTC. Despite this optimism, however, there was a major downturn in 2022 when Bitcoin (after hitting an all-time high of $68K) fell to just $16K due to several bankruptcies and the FTX crash.
Morgan Stanley’s Outlook
Michael Wilson – an analyst with Morgan Stanley – recently expressed uncertainty about what will happen this month given how high risk things are: “With uncertainty on the fundamentals rarely this high, technical[s] may determine the market’s next big move” he said. Fortunately, researchers from Citi claim that correlation between stocks and crypto has thinned out somewhat in recent years which means even if stocks take a dive, Bitcoin may remain safe.
Positive Signs for Crypto
Analysts also say there are many elements – such as reduced inflation and less aggressive interest rate hikes – that will occur in 2023 which could help bolster crypto even further. Samir Kerbage – chief investment officer at Hashdex – stated “This year’s improving macroeconomic landscape…has lifted risk assets in general” which suggests good news ahead for cryptocurrency markets.
Though Morgan Stanley believes that stocks crashing could negatively impact crypto markets, analysts point to improved macroeconomic conditions which suggest better things ahead for crypto investors throughout 2023.