Cryptocurrencies
Big Investors May Be Dragging Bitcoin Toward Market Correlation
- Morgan Stanley clients see cryptocurrency as risk barometer
- Institutions may increase correlation, but too early to know
Bitcoin Sees a Slight Bounce Back
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It may just be a coincidence that Bitcoin’s plunge preceded the latest equities selloff, but Morgan Stanley clients are watching the digital currency as a potential leading indicator for risk in the broader stock market.
“The idea is that as institutional investors seek out increasingly higher level of risk/return, that Bitcoin may represent the most risk/potentially highest return available, and hence could be evolving quickly into a primary barometer,” Morgan Stanley analysts led by James Faucette wrote in a note Wednesday. “And our conversations with investors certainly give weight to that view.”