In a recent research note, Morgan Stanley revealed that the majority of Bitcoin (BTC) traded on exchanges in February was only on one exchange, Binance. The research note stated that 81% of BTC traded on exchanges in February was traded on Binance. As a result, Morgan Stanley concludes that “traders on Binance now set the daily price for BTC.”
Morgan Stanley’s analysts argue that while investors mostly ask the firm about Coinbase, the flows on Binance should be more closely monitored to understand what is going on in the markets. The analysts provided context for the situation, stating that after Bitcoin rallied 40% in January, the volume of BTC/USDT traded on Binance reached 38 times that of the equivalent pair on Coinbase, relative to being only four times in early 2022.
On the recent rally in BTC, the analysts state that “the narrative has quickly turned to: weaker traditional banking sector = higher bitcoin price.” However, they caution that this is just a narrative that has been self-reinforced by price action. The analysts point out that Bitcoin trades as a speculative asset driven by the prospect and availability of fiat currency and resulting crypto liquidity.
The research note from Morgan Stanley provides valuable insights into the dynamics of Bitcoin trading on exchanges. Binance has become a significant player in the Bitcoin market, with traders on the exchange setting the daily price for the cryptocurrency. This highlights the importance of monitoring Binance’s flows to understand the market and its movements.
Overall, Morgan Stanley’s analysis suggests that Bitcoin’s recent rally may not necessarily be solely driven by weaker traditional banking sectors, as has been suggested by some market observers. Instead, the rally may be driven by speculative forces and the availability of fiat currency and crypto liquidity. This underscores the importance of closely monitoring the cryptocurrency markets and understanding the forces that are driving them.
#Binance #BNB #MorganStanley #crypto2023 #azcoinnews This article was republished from azcoinnews.com