Crypto Spring is on the horizon, says Morgan Stanley

Investment banking giant Morgan Stanley argued in a report on Tuesday that Bitcoin (BTC)'s halving event in six months could be the start of a new bull market.

Referring to Bitcoin's “Four Seasons,” the bank said the “Cryto Winter” may already be over.

Crypto winter is over

Morgan Stanley, the wealth management firm, describes the cryptocurrency “winter” as a “four-year crypto cycle” that begins after bitcoin peaks and investors start selling their holdings and risking new investments. It usually lasts about 13 months before the next price pool.

This period follows the crypto spring as Bitcoin slowly recovers from the trough, but investor interest remains low.

“In the current data, indications are that crypto winter may be over and spring may be on the horizon,” said report author Denny Galindo.

Galindo said it's worth considering both the timing and magnitude of Bitcoin's fall when trying to mark the end of crypto winter. “Ancient pools were about 83 percent of their respective heights,” he wrote.

Bitcoin hit its current all-time high in November 2021 at $69,000. The lowest price it has seen since then was $15,500 after crypto exchange FTX filed for bankruptcy in November 2022 – a 77% drop from its peak. Exchange problems, such as bankruptcy, are also a good indicator, Morgan Stanley said.

Bitcoin is now trading at $28,600 – up 72% year to date. “A 50 percent price increase from bitcoin's low is a good sign,” the bank added.

Half of it

The Bitcoin halving will halve the supply of Bitcoin every four years, making it twice as difficult each time. The next halving will reduce the coins earned per block from 6.25 BTC to 3.125 BTC.

Like many analysts, Morgan Stanley, such halvings are directly related to the four-year cryptocurrency cycle, three of which have occurred so far. “The shortage caused by a deliberate halving of the supply of new bitcoins could impact the price of bitcoin to trigger a bull run,” the bank said.

British multinational bank Standard Chartered is also bullish on the upcoming halving. In July, the bank predicted that Bitcoin would reach $50,000 by the end of the year and $120,000 by the end of 2024.

Some analysts believe that Bitcoin's price appreciation following halving events is purely coincidental and that the asset's price movement is driven primarily by macroeconomic factors.