Did Morgan Stanley Spark Bitcoin's October Crash? Analysts Present Connections

Recent filings by Morgan Stanley for a Bitcoin (BTC) and Solana (SOL) exchange-traded fund (ETF), alongside MSCI's decision to keep digital asset firms in its index, have stirred speculation among experts. Analysts from Bull Theory suggest these developments might indicate potential market manipulation.

Key Takeaways

Morgan Stanley filed for Bitcoin and Solana ETFs, raising questions about market manipulation.
The October announcement by MSCI to consider removing Bitcoin-related companies influenced liquidity and prices significantly.
Analysts believe a pattern of price drops followed by rebounds could signify strategic market behavior.
Recent events involve a swift rise in Bitcoin prices after significant institutional movements.

Bitcoin

Analyzing Potential Bitcoin Market Manipulation

Bull Theory analysts recently highlighted a sequence of events surrounding Bitcoin's significant price movements, pointing to a timeline that suggests possible manipulation. They argue that the decline in October and the following recovery in January appears orchestrated, bolstered by data correlations.

The initial major event occurred on October 10, when MSCI, which was previously part of Morgan Stanley, hinted at the removal of Digital Asset Treasury Companies (DATCOs) from its global indexes. This decision could impact companies like Strategy and Metaplanet that hold substantial Bitcoin assets. The potential removal from MSCI's index, known for guiding trillions in passive investments, would likely trigger institutional investors, including pension funds and ETFs, to divest. This divestment could lead to a significant reduction in institutional Bitcoin exposure and a tightening of market liquidity.

Following the announcement, Bitcoin's price dropped drastically, nearly reaching $18,000, resulting in a staggering loss of over $900 billion in the overall cryptocurrency market cap.

The Role of Morgan Stanley and MSCI Changes

The uncertainty persisted with a consultation period extending until December 31, creating a three-month period of market apprehension. This timeframe severely dampened investor interest in Bitcoin, leading passive investors to hesitate and index-linked funds to potentially face forced selling. Consequently, Bitcoin's value plummeted approximately 31%, with altcoins suffering even worse, marking the most challenging quarter for cryptocurrency markets since 2018.

However, the situation took a surprising turn on January 1, 2026, as Bitcoin began to recover, witnessing an 8% jump in just five days—from $87,500 to $94,800. This sudden surge caught many analysts off guard, especially after the extended period of negative sentiment in the market. Some analysts speculated that insiders might have had prior awareness of upcoming developments.

On January 5 and 6, the narrative shifted dramatically when Morgan Stanley announced its plans for spot Bitcoin, Ethereum (ETH), and Solana ETFs. This was shortly followed by MSCI's decision to forgo its earlier proposal to exclude companies heavily invested in cryptocurrencies from its indexes.

The sequence of these events has led analysts to theorize that MSCI may have exerted pressure in October by threatening index removals, which created a prolonged period of uncertainty resulting in suppressed prices. Once institutions accumulated assets at lower prices, Morgan Stanley entered the market with its ETF, and MSCI alleviated the exclusion threat, raising concerns over potential coordinated efforts to manipulate market conditions.

Bull Theory analysts suggest that as the market transitions back to liquidity, the same entities that may have orchestrated the previous downturn could be strategically positioned to benefit from the subsequent rebound.

Bitcoin The daily chart indicates BTC's recent correction, moving towards $91,000. Source: BTCUSDT on TradingView.com

At the time of writing, Bitcoin is trading at $91,550, down 2% from the $95,000 two-month high reached earlier this week.

Featured image from DALL-E, chart from TradingView.com