Morgan Stanley strategists say the crypto market has entered the “fall season” in Bitcoin’s four-year cycle, advising investors to harvest their gains before the potential onset of winter.
In a podcast episode titled Crypto Goes Mainstream, Denny Galindo, an investment strategist at Morgan Stanley Wealth Management, said that historical data indicates a consistent three-up, one-down rhythm in Bitcoin’s price cycles. Galindo urged investors to take profits in preparation for a crypto winter.
“We are in the fall season right now,” he said. “Fall is the time for harvest. So, it’s the time you want to take your gains. But the debate is how long this fall will last and when the next winter will start.”
The “harvest” analogy shows that major Wall Street executives are recognizing Bitcoin’s market rhythm with a cyclical investment framework, similar to commodities or liquidity-driven macro cycles.
Bitcoin dip marks “technical bear market”
On Nov. 5, Bitcoin (BTC) fell below $99,000, breaching a key macro indicator and reigniting debate over the market’s state. This put BTC below its 365-day moving average, according to CryptoQuant head of research Julio Moreno.
Bitcoin’s 365-day moving average is a technical indicator that generally indicates the overall direction of the market. Analysts say that the metric is one of the most important indicators of sentiment. The drop was widely viewed as a strong bearish signal.
Bitrue research analyst Andri Fauzan Adziima previously told Cointelegraph that the dip “officially marked a technical bear market.”
Apart from the Bitcoin dip last week, crypto market-maker Wintermute said key drivers for the market’s liquidity have stalled.
In a blog post, Wintermute said that stablecoins, ETFs and digital asset treasuries (DATs) have been the major sources of crypto liquidity. The company said liquidity inflows from all three components have reached a plateau.
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Institutional investors still view Bitcoin as a macro hedge against inflation
Even though BTC remains volatile, institutional investors remain optimistic.
Michael Cyprys, head of US brokers, asset managers and exchanges at Morgan Stanley Research, said in the podcast that despite its volatility, institutional investors have started to view Bitcoin as a legitimate component of diversified portfolios.
“Some institutional investors view Bitcoin as digital gold or a macro hedge against inflation and monetary debasement,” Cyprys said, noting that ETFs have made exposure easier. “But even that’s been a debate in the marketplace.”
He added that institutional allocations tend to be slower-moving as large investors cannot immediately change investment strategies or portfolio allocations. This is because of internal processes, risk committees and long-term mandates.
Still, he said, adoption is increasing as regulation and ETF infrastructure have lowered barriers to entry. Cyprys pointed out that spot Bitcoin and Ether ETFs have brought billions in assets under management (AUM) into the space.
SoSoValue data indicates that US spot Bitcoin ETFs currently have total net assets exceeding $137 billion, while spot Ether ETFs have $22.4 billion.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
