Analysts at the bank said all signs indicate that Bitcoin has bottomed out and the "crypto winter" is over.
Bitcoin’s (BTC) upcoming halving event in six months could be the dawn of a new bull run, investment banking giant Morgan Stanley said in a report released on Tuesday.
Speaking of Bitcoin’s “four seasons,” the bank claimed that the “crypto winter” may be over.
Crypto winter is over
Morgan Stanley Wealth Management defines crypto winter as a period in the "four-year crypto cycle" that begins after Bitcoin hits an all-time high and investors begin to sell the asset, scaring off new investment. It typically lasts about 13 months before the next price trough.
This period comes after the crypto spring, when Bitcoin slowly recovered from its lows but investor interest remained low.
“Based on current data, there are signs that crypto winter may be over and crypto spring may be on the horizon,” wrote Denny Galindo, the report’s author.
Galindo claimed that the timing and magnitude of Bitcoin’s decline are worth considering in an attempt to mark the end of the crypto winter. “The previous troughs were approximately 83% away from their respective highs,” he wrote.
Bitcoin hit its current all-time high of $69,000 in November 2021. The lowest price since then was $15,500 in November 2022 after cryptocurrency exchange FTX filed for bankruptcy, a 77% drop from the peak. Morgan Stanley said foreign exchange issues such as bankruptcies are also a good indicator of economic troughs.
Bitcoin is currently trading at $28,600, up 72% year to date. The bank added: “A 50% increase in the price of Bitcoin from its lowest point is generally a good sign that the bottom has been reached.”
Halving
Bitcoin halving refers to the fact that the supply of Bitcoin is cut in half every four years, making it twice as difficult to mine each time. The next halving will reduce the tokens earned per block from 6.25 BTC to 3.125 BTC.
Like many analysts, Morgan Stanley believes that the halving is directly correlated to the four-year cryptocurrency cycle, which has occurred three times so far. The bank noted: "By intentionally limiting the supply of new bitcoins, the shortage caused by the halving could affect the price of bitcoin, potentially spurring a bull run."
British multinational bank Standard Chartered is also bullish on the upcoming halving. In July, the bank predicted that Bitcoin would reach $50,000 by the end of the year and $120,000 by the end of 2024.
Some analysts believe that the rise in Bitcoin’s price after the halving event is purely coincidental and that the asset’s price movement is primarily driven by macroeconomic factors. #摩根士丹利 #加密货币
