banking giant Morgan Stanley, in a research report published by the central bank, tightening policy cryptocurrency market He claimed it put pressure on him.
In its report, the American investment bank stated that low interest rates, expansion of central bank balance sheets and government incentives are the driving force of rising crypto prices.
Sheena Shah, head of cryptocurrency research at Morgan Stanley, said in the report:
“Leveraged crypto markets are now weakening as the US Federal Reserve and other central banks seek to slow their balance sheet expansions and prepare markets for rate hikes.”
Stating that he has been following the market value of Bitcoin since 2013, Morgan Stanley stated that retail investor sentiment on social media started to decline late last year.
The bank stated that it thinks the general decline in the crypto market, which started in November of 2021, was effective in the decrease in investor sentiment.
After increasing inflation in the USA, the FED first gave the signal of tightening in November. The rapid increase in inflation raises the possibility that the FED will tighten monetary policy earlier than expected and increase interest rates.
The messages to be given at the January FED meeting will be important for the future outlook of the market.
*Not investment advice.