While the cryptocurrency market is on a downward trend, many important names are making comments about the market. In a report published by Morgan Stanley, he said that Ethereum (ETH) is underperforming Bitcoin (BTC), just as it did during the crypto market crash in 2018.
Banking giant Morgan Stanley announced in a report that Ethereum underperformed the leading cryptocurrency Bitcoin while the crypto market was on the decline. The report stated that US dollar liquidity has been withdrawn from the markets and expectations of higher Fed interest rates are hurting crypto prices.
Besides, analysts led by Sheena Shah also noted that Ethereum, the second-largest cryptocurrency, has dropped nearly 75 percent from its November peak.
“The circle for stablecoins is narrowing fast,” the report said. There was also reference to the halving of leverage within the decentralized crypto ecosystem since the beginning of May and the destabilization of crypto derivatives prices as they move away from their underlying assets. As a reminder, Morgan Stanley recently said that venture capital investments in crypto companies could decline this year.
Three Arrows Capital sells $33M in Staked Ethereum (stETH)
Venture capital firm Three Arrows on Tuesday traded nearly $33 million worth of Lido Staked Ethereum (stETH) for Ethereum on DeFi platform Curve.
The move resulted in stETH prices further diverging from ETH prices in the secondary markets, putting pressure on traders using the DeFi token as collateral.
Three Arrows is the second largest stETH owner to sell the token since last week. Last week, Alameda Research traded all of its assets, approximately $1.5 billion in tokens, for ETH. The deterioration of the stability of stETH to ETH is probably due to this trade, which also occurs in Curve. The DeFi token is currently trading at $1,155 while ETH finds buyers at $1,220.