Crypto Bottom Estimates: Bitcoin: Bound? – Morgan Stanley contradicts JPMorgan – 08/10/22 – News

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Because cryptocurrencies correlate strongly with stock markets, but the latter may now have bottomed out, this may also apply to Bitcoin and Co. But it’s not that simple, according to Morgan Stanley.

Many investors believe highly CNBCthat the S&P 500 closed in June at around 3,600 points. Since then, the stock index, which includes the 500 largest publicly traded US companies, has risen about 14.5 percent. Bitcoin has risen by a similar amount since the low. The largest cryptocurrency by market capitalization previously fell by around 75 percent from its all-time high of nearly $69,000 in November 2021 to around $17,600 in June 2022.

But just because the US market may have bottomed out doesn’t mean bitcoin has. Unfortunately, according to Morgan Stanley, it’s not that simple. The American investment bank thus comes to a different conclusion than JPMorgan.

Although this decline is steeper than usual for the digital currency and the correlation to stocks is at an all-time high, it may be too early to see the bottom, quotes say. CNBC Sheena Shah, Morgan Stanley Equity Strategist.

“Based on these observations, it’s hard to say if the bear market is over or if more is coming,” Shah said. “The correlation between bitcoin and the US stock market remains high, and both are sensitive to central bank tightening.”

“For this crypto cycle to find a bottom, we would expect the expectation of a decline in the fiat money supply to become expansionary again, or for crypto companies to increase crypto leverage again,” she added.

Author: Nicolas Ebert, Wall Street: Online central editorial office

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