Fed Tightening Expectations Still Driving Near-Term Crypto MarketsMorgan StanleyBy Sam BougheddaSpeaking on cryptocurrency markets, Morgan Stanley analyst Sheena Shah said in a note to clients Monday that Fed tightening expectations are still driving near-term crypto markets.Shah added that institutional crypto deleveraging appears to have paused as stablecoin market cap, an indicator of crypto liquidity, stopped falling, but leverage demand is subdued."Stablecoin availability is a sign of liquidity within the crypto world and demand for crypto leverage. In early June, Tether (USDT), the largest stablecoin, saw its market capitalization fall 20% in about a month, causing the crypto equivalent of quantitative tightening," wrote Shah. "Around the same time, bitcoin fell 45% and traded below $30k. This week marked the first time since April that stablecoin market capitalisation has stopped falling on a monthly basis. The market cap is still down 20% from the peak (12% excluding TerraUSD) but this may be a sign that the extreme institutional deleveraging appears to have paused for now."Speaking on Bitcoin, the analyst stated that during June 2022, bitcoin weakened mainly during Asia trading hours, which is generally in line with their observation that U.S. treasury yields were rising most during the U.S. hours, a representation of Fed tightening expectations."We do not think that bitcoin weakening most during U.S. hours necessarily tells us that it was U.S. investors selling bitcoin as crypto traders could trade 24 hours a day. However, it does suggest that U.S. central bank monetary policy tightening expectations have been an important driver of the crypto bear market this year."