Morgan Stanley, a New York-based investment and financial management firm, revealed Monday that crypto liquidity appears to be improving. Morgan Stanley’s Sheena Shah highlighted in a note to investors that the stablecoin market capitalization is seeing fewer redemptions for the first time since April.
Morgan Stanley Investors’ Note Says Crypto Winter Could Be Thawing, but Re-Leverage Demand Is Still Non-Existent
The crypto winter may be starting to warm as institutional investors have halted the redemption of the crypto economy’s top two stablecoins, according to a recent analysis written by Morgan Stanley’s cryptocurrency researchSheena is Shah’s lead. According to the U.K.-based analyst, demand for leverage has dropped among those investors. There’s been a massive shortfall in decentralized finance (defi) lending Shah detailed.
“There doesn’t seem to be huge demand to re-leverage in the crypto world at this moment,” Shah Remarks in the investors’ note published on Monday. “It will be hard for this crypto cycle to bottom without fiat leverage growing or crypto leverage growing,” the lead cryptocurrency analyst at Morgan Stanley added.
Morgan Stanley’s Sha explained that last week the overall stablecoin market valuation, which is currently valued at $153.26 BillionThe value of, has not fallen in value since April 2022. The Morgan Stanley analyst said that “extreme institutional deleveraging” has taken a brief hiatus for the time being. According to current market data, the USDT market cap has increased by 2.6% over 30 days, and the USDC market cap is down 4.6%.
Morgan Stanley cryptocurrency researcher Shah noted that the USDC Market Valuation slide began during July’s first week. “The fall in USDC market cap started ahead of the regulatory change and looks similar to the decline seen earlier in the year between March and May,” Shah’s note to investors explains.
While September has been a sour month in crypto history, many believe the merger could alter the 4-Year trend.
The crypto eThe value of the Economie suffered some losses over this weekend, falling from $1.18 Trillion to $1.06 Trillion by Monday (EST). The September month has been a poor month historically in crypto market history, so people are expecting the crypto economy to plummet even further. A Twitter account, called Bleeding CryptoDiscussed how crypto in September has been sour over the past four years.
“Each year we see how bad September is for crypto, but you want to believe that ‘This time it’s different’ — You can choose to stick your head in the sand, I’ll choose to listen to the market,” Bleeding Crypto tweeted. Market participants believe that this September could be different despite the low crypto prices.
That’s because The Merge is expected to take place on September 15, and it’s been assumed that ethereum (ETH) may skyrocket in value with the rest of the crypto economy lifting as a byproduct. However, It’s quite possible The Merge is already priced inLast month saw substantial gains in Ethereum, which bolstered crypto’s economy.
What do you think about the Morgan Stanley analyst’s note about crypto liquidity and the fewer stablecoin redemptions? Please comment below to let us know your thoughts on this topic.
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