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Morgan Stanley analysts believe the market should keep close tabs on non-fungible tokens following the recent plunge in stablecoins.
Source: Coindesk
MS is down 1.18%, UST is down 45.92%, and LUNA is down 41.43%.
Analysts led by Sheena Shah noted that NFTs and digital land have recorded the most speculation and inflows, with most of the investors acquiring tokens in hopes that these could be sold at higher prices moving forward.
This comes as the analysts noted that “hyped” cryptocurrency industries such as decentralized finance and crypto-backed stablecoins have recorded high liquidations, indicating that the higher prices came on speculation.
The note indicated that the focus has shifted to speculative and leveraged cryptocurrency sectors amid the anticipated global interest rate hikes and the moves of the Federal Reserve to taper down liquidity.
The bank said clients are now questioning if the steep decline in cryptocurrency prices and the failure of stablecoins to maintain their peg to the dollar could pose more risks to the broader financial market.
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