The Correlation Between Bitcoin And Stocks Is Here To Stay, Says Morgan Stanley


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Investing.com – After crashing to a low below $30,000 overnight Monday-Tuesday, the rebounded to a high of $32,680 yesterday morning but was unable to consolidate its gains, falling back to $30,250 last night, and remaining close to that threshold on Wednesday morning.

Recall that the correlation of Bitcoin with the stock markets, and in particular US technology stocks, has failed it in recent weeks, and the weak rebound posted yesterday in no way called into question the bearish bias, hence the maintenance of negative pressure on BTC.

In this regard, it should be noted that the increasingly obvious correlation between Bitcoin and equities has caused a lot of ink to flow lately.

Last night the bank Morgan Stanley (NYSE:) for example published a note in which it explains that the fact that the cryptocurrency market is now dominated by institutionals in terms of trading volumes explains this correlation:

“Retail investors are no longer the dominant cryptocurrency operators,” the bank wrote, explaining that “the increased involvement of institutions, which are sensitive to the availability of capital and therefore interest rates, has partly contributed to the strong correlation between bitcoin and stocks. »

She further predicted that this correlation will continue for the foreseeable future:

“The correlation between bitcoin and stock indices has remained high and will continue to be so unless bitcoin becomes widely used as a means of payment – ​​which seems unlikely in the near future. »

Recall that similar remarks were made the day before by billionaire investor Mike Novogratz of Galaxy Digital said during Galaxy’s first quarter earnings conference call that “crypto will likely trade in correlation with the up to until we reach a new balance”.

Underlining his belief that Bitcoin’s $30,000 support will hold, he also conceded that this threshold could give way if the Nasdaq falls below 11,000 points.



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