October 20, 2023

Morgan Stanley's Report Suggests Crypto Winter Could Be Behind Us

Morgan Stanley anticipates the next crypto rally in 2024, sparked by the upcoming halving event.

Indicators are pointing towards the possible end of the cyclical "crypto winter" bear market, as indicated in a recent report from Morgan Stanley.

In his report, Denny Galindo, the Executive Director at Morgan Stanley, asserts:

"Based on current data, signs indicate that crypto winter may be in the past and that crypto spring is likely on the horizon."

Morgan Stanley's analysis considered various metrics that have historically served as signals for bitcoin's market bottom, such as the time since its last peak, the extent of its drawdown, and miner capitulation. This data led Galindo to believe that the market's low point might already be behind us.

Approximately every four years, the reward for successfully mining a Bitcoin block is halved, a phenomenon known as the "halving." This event effectively reduces inflationary pressure on bitcoin. Notably, historical data shows that most of bitcoin's significant gains tend to occur between 12 to 18 months after these halving events. The next halving is expected in 2024, offering the potential to ignite the next crypto bull run.

The report also highlights that bitcoin's peak-to-bottom drawdown, which stands at approximately 80%, aligns with previous crypto winter cycles, which experienced average drawdowns of around 83% over a 12-14 month period from the peak.

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