• Morgan Stanley suggests that a stock crash could occur in March and cause crypto prices to drop.
• Analysts at Citi say the correlation between stocks and crypto has been thinning out, so even if stocks plummet, crypto may not follow suit.
• Positive elements like reduced inflation and less aggressive interest rate hikes may bolster crypto prices this year.
Morgan Stanley Predicts Potential Stock Crash
Morgan Stanley recently warned that a massive stock crash could come along soon that may bring the prices of digital assets such as bitcoin down. This comes after several weeks of good performance for the price of bitcoin, pushing it to new six-month highs.
Correlation Between Stocks & Crypto Thinned Out
Michael Wilson – an analyst with Morgan Stanley – believes the technicals may determine the market’s next big move due to uncertainty on fundamentals being high. However, researchers with Citi have pointed out that the correlation between stocks and crypto has thinned out somewhat in recent years, meaning even if stocks come tumbling down, bitcoin and its altcoin cousins could potentially remain safe.
Reduced Inflation & Interest Rates Could Bolster Crypto Prices
Some analysts are optimistic about what 2023 holds for cryptocurrency prices despite Morgan Stanley’s warnings. Samir Kerbage – chief investment officer at Hashdex – stated that this year’s improving macroeconomic landscape including rosier inflation expectations and a reduction in the pace of central bank rate increases will lift risk assets in general – which includes cryptocurrencies like bitcoin.
Bullish Sentiment For 2023
The sentiment for 2023 thus far is that it will be a bullish year – supported by industry heads such as Tim Draper who think the price of BTC is going to reach far beyond expectation with his suggestion of $250K per unit. Despite ending 2022 at a measly $16,600 following its all-time high of $68,000 during last year (which was attributed to FTX crash), there is still hope that 2023 will prove to be more successful for digital assets overall.
Conclusion
Overall, it seems there is both positive and negative sentiment amongst industry analysts regarding what lies ahead for digital assets such as bitcoin during 2023 – though most seem somewhat optimistic nonetheless given some believe reduced inflation and interest rates could help bolster these asset prices further over time.