Crypto Trading Splits Amid Iran War, Morgan Stanley's Crypto Ambitions | Bloomberg Crypto 3/24/2026

Summary

• Bitcoin's correlation with the S&P 500 has increased to 2.6, making it behave more as a risk-on/risk-off asset rather than a safe haven, particularly during the ongoing Iran conflict, challenging its historical role.
• Iran used Bitcoin mining to bypass sanctions, accounting for 6-8% of global mining, with 70% controlled by the IRGC, illustrating crypto's geopolitical utility.
• In Lebanon, where the banking system is collapsed, citizens are using crypto and stablecoins for daily transactions and remittances, showcasing adoption in crisis-stricken economies.
• Tokenization of equities is advancing in Europe, with Robinhood optimistic about U.S. growth pending regulatory clarity, though legacy software infrastructure remains a hurdle.
• Prediction markets are gaining traction as a new asset class on platforms like Robinhood, with no cannibalization of crypto trading, but facing regulatory pushback and legal challenges.
• Morgan Stanley is aggressively expanding into digital assets, applying for custody charters, filing for a spot Bitcoin ETF (MSBT), and planning a dark pool for tokenized equities by end-2026.
• Ledger is expanding in New York, is profitable with strong demand for its hardware and software solutions, and uses sports sponsorships (e.g., San Antonio Spurs) to maintain brand recognition cyclically.
• Prediction markets face heightened scrutiny, with lawsuits against Kalshi for illegal gambling and a Senate bill aiming to ban markets that mimic sports betting, likely heading to the Supreme Court.
• Companies like Polymarket and Kalshi are implementing insider trading prevention measures to address concerns about unfair advantages in prediction contracts.
• Institutional adoption of crypto is accelerating, with traditional finance firms like Morgan Stanley integrating digital assets into wealth management and custody services.