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

Analysts from Morgan Stanley expect nearly half a trillion #dollars to leave American banks when the US Treasury goes ahead with a plan to roll out a new batch of T-bills.

Morgan Stanley is expecting $1.364 trillion of net T-bill issuance over the rest of this year, with $1 trillion of that to be issued over the next four months alone, reports CNBC.

The bank says that the new wave of US bonds will likely put significant pressure on banks who can’t compete with the government’s offered yields.

Says analyst Betsy Graseck,

“Our fixed income team sees most of this initial [Treasury General Account] restocking to come from bank reserves, suggesting ~$450b of gross outflows over the next four months.”

US bank stocks have made a notable recovery since the pain felt earlier in the year when the industry weathered the collapse of several large institutions.

According to Graseck, however, the recovery may be short lived if banks now have to deal with a tidal wave of outflows.

“A re-acceleration of deposit outflows would end the current intra-quarter bank stock bounce.”

JPMorgan analysts made a similar call to Morgan Stanley’s earlier this month, but forecasted a slightly lower number of $1.1 trillion in T-bill issuance over the rest of 2023.

Gennadiy Goldberg, a strategist at TD Securities, also recently said,

“Everyone knows the flood is coming… Yields will move higher because of this flood. Treasury bills will cheapen further. And that will put pressure on banks…

The rise in yields could force banks to raise their deposit rates.”

In a recent research note, #MorganStanley said that despite the US government’s deal to raise the debt ceiling and the stabilization in markets that followed, more volatility could be on its way. The analysts reference 2011, when markets heavily corrected shortly after the government came to a resolution on a debt ceiling crisis.

“Against this backdrop, the relative calm that pervades markets may not be sustainable. Volatility in equity, rates and credit markets appears relatively contained and well below March levels. However, looking back to 2011, markets were also calm before the X-date but subsequently registered sharp moves.

In the three weeks after the resolution, the S&P 500 fell by more than 12%, 10-year Treasury yields declined by 70 basis points (meaning prices for those securities went up) and high-yield bond index spreads widened by more than 160 basis points.”