Morgan Stanley Warns Investors Experimenting with Digital Land Assets

The firm issued a report noting the steep declines of Bitcoin and other tokens aren‘ t tied to a decline in equity markets

Morgan Stanley is warning investors that the cryptocurrency collapse that is happening right now could spread to other areas, such as NFTs and digital real estate. The firm issued a report noting the steep declines of Bitcoin and other tokens aren’t tied to a decline in equity markets. Instead, a Morgan Stanley crypto analyst said higher digital asset prices were due to “speculation, with limited real user demand.”

The speculation isn’t limited to cryptocurrencies like Bitcoin, which has lost 40 percent of its value since April, or alt-coins Terra (Luna), which has essentially lost all of its value (99 percent). NFTs and metaverse real estate have been just as vulnerable to speculation, the report noted. This should raise concerns for investors dealing with digital real estate assets because these assets are heavily tied to NFTs and crypto. If crypto prices continue to nosedive, digital worlds like Roblox or Decentraland could lose much of their value as well.

Many investors bought digital land assets with the expectation they could sell them at a much higher price. But with a few exceptions, that’s not happening now because of the crypto crash. People who invest in crypto are used to wild ups and downs, but this recent crash has been particularly severe. Real estate companies and investors experimenting with the digital world will likely be more apprehensive for the time being. Opportunities in the digital world may not disappear, but most savvy investors won’t spend money they can’t afford to lose.