Expectations of more liquidity in the U.S. dollar underpinning the banking sector after a series of forced shutdowns are driving bitcoin’s (BTC) rally, but other factors are at play, Morgan Stanley said. It states in the March 26 investigation report.
Bitcoin, the world’s largest crypto asset by market capitalization, is up 69% this year.
Analysts led by Sheena Shah wrote: “Bitcoin order book liquidity is at its lowest level in a year, meaning lower volumes could trigger bigger price swings than before. There is,” he wrote.
Binance currently has an 80% share of Bitcoin trading, meaning that Binance traders set the price of Bitcoin.
Issuance of the largest stablecoin, Tether (USDT), rose 10% last month alone and 16% this year, compared to other stablecoins such as Binance USD (BUSD) and USD Coin (USDC). It wasn’t enough to offset the decline, the report said.
A stablecoin is a type of cryptocurrency whose value is pegged to another asset, usually the US dollar. Stablecoin flows represent the flow of funds in and out of the crypto ecosystem.
More than half of Tether’s total issuance (70% of recent issuance) is on the TRON blockchain, and the company behind it is now the subject of a lawsuit by the SEC, Morgan Stanley says. pointed out. He added that crypto exchanges Kraken and Binance appear to be Tether’s new receptacles.
｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Original: Bitcoin Has Benefited From US Dollar Liquidity to Support Banks: Morgan Stanley