Despite the recent fall in %Cryptocurrency prices, more than 100 new digital assets have been created in the past week, says investment bank %MorganStanley ($MS).
Most of the new cryptocurrencies have been created on %Decentralized finance (DeFi) exchanges, said Morgan Stanley in a new report on the state of the global crypto sector.
The growth in Bitcoin’s market capitalization over the past year has generally tracked growth in the global M2 money supply, the Morgan Stanley report said, noting that the market capitalization of the entire cryptocurrency market has grown 10-fold since the start of 2020.
The growth has been fueled largely by easy central bank monetary policy during the past two years. However, volatility in recent months has meant that the cryptocurrency market capitalization has fallen from a peak of $2.92 trillion U.S. last November to under $2 trillion U.S. today.
In terms decentralized finance (DeFi), its growth has closely tracked the price of %Ethereum ($ETHER), according to Morgan Stanley.
%DeFi is an umbrella term used for lending, trading and other financial activities carried out on a blockchain, without needing to use traditional intermediaries such as banks or credit unions.
Morgan Stanley said that trading activity has been weak during the current %CryptoBearMarket, this year with exchange trading volumes of around $750 billion U.S. in March, half that of the peak last November.
Bitcoin has had a high correlation with equities since early 2020 and has had almost zero correlation with gold in recent years, the report noted.
Cryptocurrencies have been more correlated with media and entertainment stocks in the U.S., as both are possibly driven by similar catalysts, said Morgan Stanley.
Bitcoin is currently trading at just under $40,000 U.S., down about 40% from an all-time high of $68,000 U.S. last November.