Morgan Stanley Analyst Says Crypto Economy’s Liquidity Improved, but There’s ‘No Huge Demand to Re-Leverage’

According to Sheena Shah, Morgan Stanley’s cryptocurrency research leader, the crypto winter is heating up as institutional investors have stopped the redemption of crypto’s top two stablecoins. According to the U.K.-based analyst, demand for leverage has fallen as well. Shah explained that there has been a huge shortfall in decentralized financing (defi), lending.

Shah noted in Monday’s investors’ note that there doesn’t seem like a lot of demand for re-leverage within the crypto world. Morgan Stanley’s lead cryptocurrency analyst added that it would be difficult for the crypto cycle to bottom if crypto leverage or fiat leverage does not grow.

Morgan Stanley’s Sha stated that the overall stablecoin market value, currently valued at, didn’t drop in value last week for the first time since April 20,22. According to the Morgan Stanley analyst, ‘extreme institutional debt’ has been temporarily suspended. According to current market data, the market capitalization for $153.26 Billion has increased by 2.6% over the past 30 days, while the usd coin (USDC), is down by 4.6%.

Morgan Stanley’s crypto researcher noted the USDC market value slide and also pointed out that it began in the first week July. The note Shah sent to investors explained that the USDC market cap fell before the regulatory changes and was similar to the declines seen in March and May.

Although September is traditionally a bad month for crypto, some believe that the Merge could change the 4-year trend.

This weekend, the crypto economy suffered some losses as its value fell from $1.18 trillion down to $1.06 trillion Monday afternoon (EST). As September is a historically bad month for crypto market history, people expect that the crypto economy will continue to fall. The Twitter account Bleeding crypto shared their thoughts on September’s sourness for crypto over the past four years.

“Each year, we see how terrible September is for crypto. But you want to believe that this time it’s different.” Bleeding Cyclo tweeted. Market participants believe that this September may be different despite the lower crypto prices.

It’s possible that The Merge will take place on September 15,. With the rest of crypto economy lifting, ethereum ( ETH) could see a significant increase in value. However, it’s possible that The Merge is priced inETH saw significant gains which helped to boost the crypto economy.

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