The report states that the cryptocurrency is not isolated from the traditional banking system and its price is supported by the liquidity of the US dollar.
As concerns grow about traditional banks following forced closures in the United States, it will be a “shining moment” for bitcoin (BTC) because the largest crypto holders in wallets Individuals should be protected from counterparty risk, investment bank Morgan Stanley (MS) said in a report.
Morgan Stanley notes that bitcoin is designed as a way for people to keep value in a private digital wallet without the need for an intermediary to store value for them or trigger transactions.
In fact, “bitcoin is not isolated from the traditional banking system” because its price is backed by “USD bank liquidity, making it traded as a speculative asset rather than a currency.” currency,” the report said.
Analysts Sheena Shah and Kinji C Steimetz wrote: “Cryptocurrency prices increase rapidly in 2020/21 due to central bank monetary expansion, causing capital to shift from the traditional fiat banking world to the world of fiat banking. cryptocurrency world”.
Morgan Stanley said that although the bitcoin network can operate without a bank, the price of BTC is always influenced by the policy of the US Federal Reserve (Fed) and it needs banks to facilitate it. in favor of new money flowing into the cryptocurrency market.
Bitcoin’s reaction to negative news has changed in recent days, at press time BTC price has increased 36% over the past 7 days to climb to $27,454, after the Fed and the Treasury Department The US said it would support the banking industry. However, last week, at the height of uncertainty, bitcoin fell along with risky asset classes and bank stocks, which trade as a speculative asset.
“Bitcoin will appreciate as bank uncertainty increases,” the note added.
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