Morgan Stanley released a research report stating that Bitcoin is not a currency for transactions, but rather a speculative asset. With increasing concerns about traditional banks being forced to close in the United States, this should be a shining moment for Bitcoin, as holders of the largest cryptocurrency in private wallets should be protected from counterparty risks.
According to Morgan Stanley, Bitcoin was designed as a way for people to hold value in private digital wallets without the need for intermediaries to store value or facilitate transactions. In practice, Bitcoin is not isolated from the traditional banking system, as its price is supported by USD banking liquidity, making it a speculative asset rather than a currency for transactions.
The report also noted that the growing regulatory scrutiny and the perceived risks associated with holding cryptocurrencies may further increase Bitcoin’s appeal as a speculative asset. Furthermore, Bitcoin’s limited supply and halving events are expected to provide upward pressure on its price in the long term.
The report acknowledged that cryptocurrencies and blockchain technology have the potential to disrupt traditional finance, but this will require overcoming significant challenges, including regulatory hurdles, scalability issues, and security risks.
Morgan Stanley’s report underscores the growing acceptance of cryptocurrencies as a new asset class and highlights the need for investors to understand the differences between cryptocurrencies and traditional assets. As more investors recognize Bitcoin’s potential as a speculative asset, it may further fuel its price appreciation and attract more mainstream adoption.