According to investment bank and research expert Morgan Stanley, Bitcoin not only matches Nasdaq’s behavior in the Dotcom bubble, but it is moving 15 times faster.
Sheena Shah, Morgan Stanley’s strategist, explained that Bitcoin has seen a total of four bear markets. The price decline in those range from 28% to 92%, unlike Tom Lee’s predictions. The Fundstart team noticed only two bear markets, one with a 93% drop and the other with an 86% drop. During these markets, Bitcoin lost almost a 45 to 50% value but recovered by 250% to 280% after the price slump. This is exactly what happened to Nasdaq, “The Nasdaq’s bear market from 2000 had five price declines, averaging a surprisingly similar amount of 44 percent,” said Shah.
Comparing trading volumes of Bitcoin, she stated that these have increased by 300% since December 2017, but have fallen down after the bearish markets. While many people look at these increasing numbers positively, Shah said that trends show “not an indication of more investor activity but instead a rush to get out.”
The company also spoke about Tether (USDT) and claimed that the coin looked like an “interesting development”. Shah further stated, “Over the coming years, we think that market focus could turn increasingly towards cross trades between cryptocurrencies/tokens, which would transact via distributed ledgers only and not via the banking system.”
Tether’s value has been $1 ever since 2015, as it is pegged to the dollar. The coin is mostly used to buy other cryptocurrencies but it has a controversial background. There are almost 2.2 billion USDT in circulation but rumors have stated that there aren’t enough dollars to back these coins. According to anonymous analysis, it was noted that Tether was released when Bitcoin’s price dropped. All of this lead officials to look into the matter, which is why the US Commodity Futures Trading Commission subpoenaed the company in December 2017.
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