Morgan Stanley says there is still much leverage in the crypto ecosystem

2022/11/14 11:58

According to CoinDesk, the collapse of FTX and Alameda has sparked another round of deleveraging in crypto markets, and that’s likely to spur more “crypto quantitative tightening,” Morgan Stanley (MS) said in a research report Friday.
Creditors are selling digital assets to cover their risks, adding to market volatility, and are likely to reveal their exposures in the next few weeks. The spillover to equity markets so far is limited because crypto firms mainly lend to each other, the report said.
Morgan Stanley says many events have led to the latest bout of volatility in the crypto market, but the key question is “how to value crypto tokens that offer a service but don’t offer the token holder a stake in the company (like equity) or a claim on assets in the case of a default (like debt.)”

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