Morgan Stanley: Bitcoin Is A Dot-Com Bubble That Will Burst Any Minute
Banking giant says Bitcoin phenomenon will end like the dot-com bubble
American elite banking giant, Morgan Stanley, has predicted that Bitcoin phenomenon will end like the dot-com bubble in the early 2000's but faster.
18 years ago, the Nasdaq rallied 250 to 280 percent in its most "exuberant" periods ahead of bear markets, similar to the cryptocurrency market, Morgan Stanley said in a note to its clients:
"Just that the bitcoin rally was around 15 times the speed," said Sheena Shah, strategist at Morgan Stanley, as quoted by CNBC.
RT reports: Since emerging in 2009, bitcoin has seen five bear markets with price drops of between 28 and 92 percent. In the most recent fall, bitcoin lost nearly 70 percent in value since the December peak of $20,000.
There are similarities with the Nasdaq behavior of 2000. "The Nasdaq's bear market from 2000 had five price declines, averaging a surprisingly similar amount of 44 percent," Shah said.
A rise in trading volumes could be another indicator of bitcoin’s nearing collapse, added the Morgan Stanley analyst. "The follow-up rally for both bitcoin and the Nasdaq always saw falling trading volumes," Shah said. "Rising trade volumes are thus not an indication of more investor activity but instead a rush to get out."
Bitcoin was up 2.88 percent on Tuesday, trading near the $8,500 mark. Its rival ethereum was sliding 0.25 percent at the time of writing and was trading at $529. The majority of cryptocurrencies were trading higher, with qtum digital token gaining the most. Qtum surged 31 percent and rose as the 20th largest cryptocurrency, according to Coinmarketcap estimates.
According to CoinThud: The head of the Financial Stability Board (FSB) and Bank of England Governor, Mark Carney, has told G20 members that cryptocurrencies “do not pose risks” to the world economy.
According to a report on Sunday by Reuters, Carney made the statement in a letter to G20 officials in a letter dated March 13.
The welcome news sent cryptocurrency prices into the green across the board today.
Bitcoin’s price jumped up by around $1000 from lows over the weekend, according to Coinmarketcap data.
The Coin Thud live price charts show that Bitcoin’s value is up by around 12.5% over the last 24 hours, at time of press.
Mr. Carney’s letter was addressed to Central Bank Governors G20 Finance Ministers.
Members will gather for the annual summit in Argentina that starts on Tuesday, March 20.
Carney message to G20 dispels the misconceived idea that cryptocurrencies such as Bitcoin are having a negative effect on financial security.
In the letter, Mr. Carney states:
“Responding to the concerns of members, the FSB has undertaken a review of the financial stability risks posed by the rapid growth of crypto-assets.
“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time. This is in part because they are small relative to the financial system.”
Eased the fears of further regulations