• The prices of bitcoin and various other forms of crypto have been doing well in recent weeks.
• Morgan Stanley is now warning that a massive stock crash could come soon, which might bring the prices of digital assets down.
• Despite this, some analysts suggest that reduced inflation and less aggressive interest rate hikes could help bolster crypto even further.
Recent Price Spikes
The prices of bitcoin and various other forms of crypto have been doing well these past few weeks. Spikes have occurred that have brought assets like bitcoin to new six-month highs.
Morgan Stanley’s Warning
Morgan Stanley is now saying that a massive stock crash could come along soon that may bring the prices of these digital assets down. Michael Wilson – an analyst with Morgan Stanley – recently explained: We think March is a high-risk month for the next leg lower in stocks. Stocks tend to figure it out a month early and trade lower, and this cycle has illustrated that pattern perfectly. With uncertainty on the fundamentals rarely this high, the technical[s] may determine the market’s next big move.
The good news is that this could just be a case of gloom and doom given researchers with Citi claim the correlation between stocks and crypto has thinned out somewhat in recent years. Thus, it’s safe to assume even if stocks come tumbling down, bitcoin and its altcoin cousins could potentially remain safe.
Not Everyone Is Negative In addition, some analysts say there are many elements – such as reduced inflation and less aggressive interest rate hikes – that will occur in 2023 that could help bolster crypto even further. Samir Kerbage – chief investment officer at Hashdex – stated in a blog post: This year’s improving macroeconomic landscape, including rosier inflation expectations and a reduction in the pace of central bank rate increases, has lifted risk assets in general.
Though Morgan Stanley has warned about possible stock crashes, some analysts still believe reduced inflation can help keep cryptos stable should markets decline sharply this month or later on during 2023