“We are in the midst of another deleveraging event in the crypto ecosystem and it is so far having limited spillover to broader equity markets beyond sentiment, as crypto institutions lent to each other,” Morgan Stanley analyst Sheena Shah said in a note Friday.
“We expect another round of crypto QT” — or what the firm has previously described as the “crypto equivalent of quantitative tightening” — “with creditor exposures revealed in coming weeks,” she added. “These creditors are currently selling crypto assets to cover risks, adding to volatility.”
