Does higher volatility in foreign exchange markets correlate with increased demand for cryptocurrencies, essentially suggesting that investors view digital assets as safe havens?
Does higher volatility in foreign exchange markets correlate with increased demand for cryptocurrencies, essentially suggesting that investors view digital assets as safe havens?
This was the question analysts at Morgan Stanley put forward in a note to clients earlier this week.
Spurring on the query, they said, was an emerging narrative that cryptocurrencies have the potential to act as a "store of value," or a form of shelter from inflationary pressures, wasteful government spending, and "other macroeconomic or geopolitical risks that could potentially erode the value" of fiat currencies over time.
To test the notion, the analysts including James Lord and Simon Waever explored whether there have been past surges in crypto demand during times of "high macroeconomic uncertainty and financial market stresses."