Investment banking firm Morgan Stanley says that over 100 digital assets were created in the past week, mainly on DeFi decentralized exchanges.
The firm observed that cryptocurrencies have traded like risk assets because of the stimulus from the governments and the central banks.
The bank adds that the Federal Reserve policy could mean that the liquidity-driven cryptocurrency momentum trade has reversed.
The report attributes Bitcoin market capitalization as having tracked growth in the global M2 money supply, citing the increase in the crypto market capitalization in 2020 after the central bank easing.
Morgan Stanley reports that the trading volumes in cryptocurrency exchanges dropped about 50% to $750 billion in March compared to November last year.
The report noted that bitcoin remains highly correlated to the media and entertainment stocks in the U.S. and has almost zero correlation to gold.