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▲ Bitcoin (BTC), virtual assets/AI generated image
Morgan Stanley emphasized the need for investors to be cautious, stating that structural risks are accumulating behind the recent bullish trend in the financial market.
According to Blockspace, a cryptocurrency specialized media outlet, on April 20 (local time), Morgan Stanley diagnosed that the current market is not adequately reflecting key risks such as geopolitical conflicts and inflationary pressures. Lisa Shalett, Chief Investment Officer (CIO) of Morgan Stanley Wealth Management, assessed that the overall market optimism has reached an excessive level. She explained that even though this bull run has entered a mature stage, expectations are excessively high, creating a fragile structure where even small variables can cause significant shocks. In particular, the forecast for corporate earnings growth set at 14-16% annually is a dangerous environment that allows no room for error, according to the analysis.
Geopolitical uncertainty was identified as the most direct risk factor. Tensions between the United States and Iran are escalating, expanding instability around the Strait of Hormuz. The fact that Iran is demanding Bitcoin (BTC)-based fees for oil tanker passage is acting as a new variable in international logistics and energy markets. This is interpreted as a change suggesting the possibility of Bitcoin being used for sanctions evasion or as a geopolitical tool, beyond a simple cost issue. Simultaneously, concerns about a re-ignition of inflation due to rising oil prices are also weighing on risk assets.
The surge in energy demand due to the spread of artificial intelligence was also cited as a major variable. The rapid expansion of artificial intelligence (AI) adoption has significantly increased data processing demand, which is likely to lead to increased burden on power supply and demand and rising data center operating costs, according to the analysis. Morgan Stanley pointed out that the market is focusing only on expectations of productivity improvement, while underestimating the burden of infrastructure investment and energy bottleneck issues.
The virtual asset market is also not free from these macroeconomic changes. Morgan Stanley is expanding its market participation through the launch of its own Bitcoin-related financial products, but it warned that as Bitcoin becomes incorporated into institutional assets, its regulatory sensitivity and impact from macroeconomic variables could increase. While the rising status of Bitcoin is positive, it also increases the possibility of being directly affected by geopolitical conflicts, the analysis suggests.
Morgan Stanley assessed that the current market rally largely depends on liquidity and sentiment rather than fundamental improvements in the macroeconomic environment. It warned that the market could experience a sharp correction if geopolitical tensions are delayed or inflation indicators exceed expectations. Accordingly, investors are advised to improve the quality of their portfolios and adopt diversification strategies, and there is a growing risk of being left behind in the market if they fail to recognize structural changes.
*Disclaimer: This article is for investment reference only and does not take responsibility for investment losses based on it. The content should be interpreted for informational purposes only.*
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