Morgan Stanley Says Ether Underperformance Echoes Crypto Downturn of 2018

Expectations of higher Fed interest rates are weighing on crypto prices, the bank’s analysts said.

The largest altcoin, ether (ETH), is underperforming bitcoin (BTC), just as it did during the downturn in crypto markets in 2018, Morgan Stanley (MS) said in a report Monday.

U.S. dollar liquidity is being withdrawn from markets and expectations of higher Federal Reserve (Fed) interest rates are hurting crypto prices, the report said.

Ether, the second-largest cryptocurrency, has dropped about 75% from its November peak, analysts led by Sheena Shah wrote.

“When the ETH/BTC relative cross falls, it is a sign that the broader crypto enthusiasm is waning” as money is being pulled out of the more volatile alternative coins, the note said.