Did Morgan Stanley Orchestrate Bitcoin October Crash? Analysts Draw Correlations

Overview

Recent developments involving Morgan Stanley and MSCI have sparked significant speculation regarding potential market manipulation in the cryptocurrency sector. Analysts from Bull Theory have drawn connections between key events that transpired around Bitcoin’s October crash and subsequent recovery, suggesting a calculated orchestration behind these movements.

Key Events and Their Implications

Morgan Stanley’s filing for a Bitcoin and Solana exchange-traded fund (ETF) coincided with MSCI’s decision to keep digital asset companies in its index, raising eyebrows among market analysts. The analysts from Bull Theory have pointed out a timeline of events that suggest a possible manipulation of the Bitcoin market.

The pivotal moment occurred on October 10, when MSCI, which was previously a division of Morgan Stanley, proposed removing Digital Asset Treasury Companies (DATCOs) from its global indexes. This decision was particularly impactful as it would affect companies like Strategy and Metaplanet, which hold significant Bitcoin assets. MSCI’s indexes guide trillions of dollars in passive investments, and the potential removal of these companies could force institutional investors, including pension funds and ETFs, to divest their holdings. Such a shift would lead to a substantial reduction in institutional exposure to Bitcoin, resulting in a tightening of liquidity in the market.

In light of MSCI’s announcement, Bitcoin’s price saw a dramatic decline, falling nearly $18,000. This drop wiped out over $900 billion from the total cryptocurrency market capitalization. The uncertainty surrounding the MSCI decision continued with a consultation period that remained open until December 31. This three-month period created a climate of anxiety among investors, leading to a freeze in demand for Bitcoin. Consequently, passive investors became cautious, and index-linked funds faced the risk of forced selling, which contributed to a significant price drop—Bitcoin fell approximately 31%—marking the worst quarter for crypto markets since 2018.

However, the market dynamics shifted on January 1, 2026, when Bitcoin experienced an unexpected surge, increasing by 8% within five days. This rise from $87,500 to $94,800 left analysts puzzled, particularly given the abrupt halt to the relentless selling pressure that had characterized the preceding months. The sudden upturn led to speculation that insiders may have had advance knowledge of forthcoming positive developments.

On January 5 and 6, the narrative changed dramatically as Morgan Stanley announced its plans for spot Bitcoin, Ethereum, and Solana ETFs. This announcement was followed closely by MSCI’s decision to abandon the proposal to exclude crypto-heavy companies from its indexes.

From author

The sequence of events raises critical questions about the integrity of market movements and the role of major financial institutions in shaping cryptocurrency prices. Analysts’ claims of potential manipulation highlight the need for greater transparency and oversight in the crypto market. As institutional interest in digital assets continues to grow, the implications of these developments could have lasting effects on market dynamics.

Impact on the crypto market

• The proposed removal of DATCOs from MSCI indexes created significant uncertainty, leading to a major price drop for Bitcoin and other cryptocurrencies.
• Institutional investors faced potential forced selling, which contracted liquidity and exacerbated the market downturn.
• The recovery of Bitcoin following the announcements from Morgan Stanley and MSCI suggests a potential shift in market sentiment among institutional players.
• Analysts are concerned that the events may indicate a coordinated effort to manipulate market conditions, impacting investor trust in the crypto sector.
• The interplay between major financial institutions and cryptocurrency markets continues to evolve, signaling a complex relationship that could shape future trends.