Crypto has had a rough few days. The biggest test is still to come, Morgan Stanley strategists say.

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It was not a good weekend in the cryptospace.

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bitcoin btcusd,
-1.43%
The fall to a low of $42,000 over the weekend – a drop of almost 30% – and a recovery to the $48,000 level was still down about 8% from Friday. Anyway, $42,000 is a lot better than the zero that some holders of various cryptos were looking for after hackers stole $150 million from Bitmart. And last week, someone stole $120 million worth of tokens from decentralized finance platform BadgerDAO.

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Still, there’s a saying to buy when there’s blood on the streets, and El Salvador President Nayib Bukele said he got the call (yes phone) to buy 150 bitcoins for your country at an average price of $48,670.

Nicolas Kolas, co-founder of Datatrack Research, said it was no accident that the big drop occurred during the weekend, which he said was likely the result of forced sales. “Note: There is no general global regulatory framework for financial leverage associated with virtual currency trading. We have heard of 50:1 and even 100:1 leverage among people who trade these assets on the day No wonder when prices start moving around unexpectedly, you might get a random sale at an inappropriate time,” he said.

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Putting aside the events of the past week, crypto is heading towards a challenging time – a Federal Reserve rate-hike cycle. Morgan Stanley strategist Michelle Weaver said this is one of four major investment debates the broker’s analysts have identified for next year.

“Bitcoin has been around since the global financial crisis and was a reaction to the Fed’s quantitative easing policies and poor sentiment around traditional banking. Some retail customers are choosing the cryptocurrency because they want to transact in a decentralized system without banks. However, if With capital no longer being cheap, can the preference for cryptocurrency-based transactions persist if they are higher cost, higher risk and less convenient than existing payment systems,” she asked.

buzz

Early reports from South Africa, which first reported the existence of the Omicron version of the coronavirus, are encouraging, according to the South Africa Medical Research Council, which requires relatively low levels of high-level care for those infected. Strategists at Goldman Sachs say that the medical evidence so far is consistent with a scenario where the virus spreads rapidly, but immunity against hospitalization is only slightly eroded, in which case they occur during the first trimester. We see an annual decline of 2.5 points in global growth.

The People’s Bank of China said it would cut reserve requirements by half a point. Chinese property developer Evergrande 3333,
-19.56 percent
previously warned it could run out of money as it tries to service the $310 billion in debt. “It is anything but routine, except in the sense that it is” [is] How should central banks react to a sudden surge in financial risks,” said Craig Botham, chief China+ economist at Pantheon Macroeconomics, of the PBOC’s move.

Chinese Internet-services giant Alibaba Baba,
-8.23%
Reshuffled its e-commerce team and said it would be promoted to deputy chief financial officer.

Hedge fund Engine Capital is advancing Kohl’s KSS,
-2.89%
The Wall Street Journal reported that either to sell the company or to wind down its e-commerce business.

BuzzFeed is going public Monday, after shareholders of special purpose acquisition company 890 Fifth Avenue Partners approved their merger.

Electric-vehicle maker Lucid LCID,
-2.35%
Premarket trading declined sharply after the Securities and Exchange Commission disclosed, requesting documents relating to its merger with SPAC.

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Market

US stock futures were mixed with the S&P 500 ES00 on Monday.
+0.27%
Nasdaq-100 contracts as high as NQ00,
-0.32%
Futures fell as investors digested the latest news on the spread of the coronavirus and prepared for new inflation data later in the week.

Yield on 10 Year Treasury TMUBMUSD10Y,
1.395%
was 1.39%.

top ticker

Here are the most active tickers on Businesshala as of 6am.

anchor

security name

TSLA,
-6.42%

Tesla

AMC,
-4.19%

AMC Entertainment

GME,
-5.05%

GameStop

NIO,
-11.19%

NIO

ES00,
+0.27%

E-mini S&P 500 Futures

TMUBMUSD10Y,
1.395%

US 10 Year Treasury Note

DXY,
+0.08%

US Dollar Index

Dad,
-8.23%

Alibaba

NVDA,
-4.46%

NVIDIA

NQ 00,
-0.32%

E-mini Nasdaq-100 Futures

random reads

You’ve never heard of this index Tracks $1.3 trillion in funds,

an african-american couple His home-value valuation improved by $500,000 — by pretending to be the owner of the house to a white friend, and hiding their pictures.

A study finds China Weather changed before political festival,

Want more for the day to come? sign up for The Baron’s Daily, this morning’s briefing for investors, including exclusive commentary from Barron’s and Businesshala writers.

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