Against the backdrop of a protracted crisis in the cryptocurrency market, retail investor interest in digital assets has waned, though demand for regulated products from clients of traditional institutions has risen. This is according to a Morgan Stanley report, CoinDesk reports.
After the collapse of FTX and Alameda Research, the market is re-evaluating the value of issued tokens and their use as margin collateral, according to experts.
Morgan Stanley respondents in the industry expect a further wave of deleveraging and bankruptcies.
Respondents found it difficult to specify the timing of the process’s end, but expressed confidence in the continued development of cryptography, blockchain and DLT, as well as an increased role for them in trading financial assets.
Analysts say the current bear market resembles the 2017–2018 period, when Bitcoin’s price fell about 70% from its peak. The difference is greater leverage, driven by the rising role of market makers, trading firms and institutions at the expense of retail investors.
Morgan Stanley emphasised that building the infrastructure remains key for participants in the industry. They also noted that, according to some investors, it will take 10 to 15 years before cryptocurrencies enter the mainstream.
Earlier, Glassnode analysts pointed to a shift among market participants from distribution to accumulation of bitcoins. The trend is evident across almost all categories and is most pronounced among addresses holding less than 1 BTC.
Earlier, JPMorgan predicted the continued supremacy of centralized platforms over their decentralized counterparts despite the FTX collapse.
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