Do Morgan Stanley, JPMorgan Recent Moves Raise Questions Over Crypto Market Dynamics?

Chanos‘s bet, detailed in a Bloomberg interview that month, framed MSTR as overleveraged despite its 1.16x NAV multiple, the lowest in the cycle, per JPMorgan’s November 20 note.

This narrative gained legs, pressuring MSTR shares even as Bitcoin climbed 45% through summer.

Crypto Market News: How This Affected MSTR

Fast forward to July 2025, JPMorgan allegedly hiked MSTRs margin requirement from 50% to 95%, a move buried in brokerage.

Higher margins demand more collateral, triggering forced sales if prices dip, which is exactly what unfolded in Octobers 30% BTC rout.

Crypto Rover noted in his thread:

“This move alone weakened MSTR weeks before any MSCI news existed.”

August brought escalation. JPMorgan launched documents for a structured product linked to BlackRocks IBIT ETF, offering indirect Bitcoin exposure with lower volatility, as filed with the SEC on August 12.

Morgan Stanley, MSCIs original parent until its 2007 spinoff, had already dipped toes via similar wrappers.

Then, on October 10, MSCIs consultation note questioned classifying firms with over 50% assets in digital holdings as “operating companies,” per the document.

Four days later, Morgan Stanley filed for an IBIT-linked product with the SEC, timed to capitalize on the uncertainty.

The crescendo hit November 20. JPMorgan simultaneously published IBIT Note sales docs and republished MSCI risks in a client alert, as @cryptorover highlighted.

Two weeks prior, the bank filed its own IBIT product. MSTRs short interest, at 9.74% of float on November 15 per Nasdaq, ticked up 0.5% amid the noise.

Meanwhile IBIT inflows surged $1.2 billion that week, Farside Investors reported November 22.

Crypto Market Shifts: Capital Flight from DATs to Structured Plays

These actions reveal a deliberate pivot in the crypto market. Digital asset treasuries (DATs) like Strategy, MSTR stock trading at 3x NAV in May, now face structural headwinds.

The MSCI review, due January 2026, could bar DATs from passive indices, prompting $2.8 billion in forced sales by funds tracking them, JPMorgan estimated.

Crypto Rover put it bluntly: “Weaken MSTR liquidity. Launch Bitcoin-exposure bank products. Raise doubts about BTC-heavy public companies.”

Institutional flows tell the tale. Wall Street trimmed $5.38 billion in MSTR holdings during Q3 2025, per 13F filings analyzed by TheStreet on November 24, redirecting to ETFs.

BlackRock‘s IBIT, with $42 billion AUM as of November 28 per its site, captured 70% of spot Bitcoin ETF inflows YTD—$15.2 billion—while Grayscale’s GBTC saw $2.1 billion outflows.

Morgan Stanley‘s filings, including a November 6 SEC submission for BTC-linked notes, position it to siphon more, offering yields via embedded options that DATs can’t match without leverage risks.

In the broader crypto market, this redirection amplified the October-November correction. Bitcoin‘s 28% drop from $126,300 on October 7 to $91,500 by November 19 outpaced by ETF AUM’s 35% plunge to $110 billion, per SoSoValue data on November 19.

Altcoins fared worse: Ethereum down 32%, Solana 25%, as liquidity chased safer wrappers. Yet on-chain metrics resist the gloom—whales accumulated 18,000 BTC during the dip, Santiment reported November 27, signaling conviction beneath the surface.

Wall Streets Long Game in Crypto Market

This isn‘t JPMorgan or Morgan Stanley’s first rodeo in the crypto market. Both FUDed Bitcoin for years, JPMorgans 2017 “Ponzi scheme” memo from CEO Jamie Dimon drew fines, yet now holds billions via ETFs.

Goldman Sachs, an early critic, manages $1.5 billion in BTC futures as of Q3 2025, per its filings. The pattern？ Create doubt, buy low, productize access.

Chanos closed his MSTR short in late October, telling CNBC on November 1 the premium had collapsed to unsustainable levels.

But banks structured products, with embedded hedges, appeal to conservative clients wary of pure-play DATs.

JPMorgans November 20 alert, resurfacing MSCI risks, coincided with a 5% MSTR drop that day, per TradingView data.