Why Bitcoin, Ethereum, and XRP Prices Are Falling Amid Morgan Stanley Developments

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Cryptocurrency prices fell broadly on Tuesday, with Bitcoin, Ethereum and XRP all trading lower as investors locked in recent gains and overall market sentiment turned bearish.

The total crypto market value slipped to about $3.14 trillion, down just over 3% on the day, according to market data. 

Broad Pullback After Recent Rallies

Bitcoin fell more than 2% to trade below $92,000, while Ethereum slid over 3% to around $3,200. XRP also dropped sharply, retreating more than 7% in 24 hours after strong gains earlier this month.

The moves came after several days of rising prices across major tokens, prompting a round of profit-taking. Market indicators showed average crypto momentum returning toward neutral levels after recent overbought conditions.

This fresh pullback in cryptocurrency prices has reignited debate over whether recent market swings are being driven by large institutional actions rather than retail selling.

The discussion centers on a series of events involving Morgan Stanley and index provider MSCI, which some market participants say helped shape crypto prices over the past three months. There is no official confirmation of coordination, but the timing has raised questions.

October Shock Sparked Sharp Sell-Off

As observed by experts, the story begins on October 10, when MSCI proposed changes to its global indexes that could have excluded companies holding large amounts of Bitcoin on their balance sheets.

Those companies include major corporate Bitcoin holders, and MSCI indexes influence trillions of dollars in passive investment flows. The proposal created fears that pension funds and index-linked products would be forced to reduce exposure.

Within minutes of the announcement, Bitcoin fell sharply, triggering a wider crypto sell-off that wiped out hundreds of billions of dollars in market value.

Months of Uncertainty Weighed on Prices

The consultation period around the index changes stayed open until December 31, leaving markets under a cloud of uncertainty for nearly three months.

During that time, demand remained weak as investors avoided assets that could face forced selling. Bitcoin dropped more than 30% over the period, while many altcoins fell even further, marking one of the weakest quarters for crypto in years.

Sudden January Bounce Raised Eyebrows

At the start of January, prices reversed direction. Bitcoin climbed roughly 8% in the first few days of 2026, despite no major positive news.

The steady buying and repeated daily gains surprised many observers, especially after months of pressure. Attention then turned to what might be changing behind the scenes.

Policy Reversal and ETF Filings Coincide

On January 5, Morgan Stanley filed paperwork related to new spot crypto exchange-traded funds, including products tied to Bitcoin, Ethereum, and Solana.

Less than a day later, MSCI said it would not go ahead with the proposed index removals that had worried markets since October.

The decision effectively removed the main source of uncertainty that had weighed on prices for months, just as new investment products were being introduced.

However, there is no evidence showing the events were planned together, and neither Morgan Stanley nor MSCI has suggested any link beyond routine regulatory and product decisions. For now, the latest price drop appears tied to volatility and profit-taking rather than a single confirmed trigger.