In today's volatile financial markets, the linkage between Bitcoin and U.S. stocks has attracted much attention. This connection between seemingly unrelated assets has aroused people's curiosity. Why do Bitcoin and U.S. stocks have linkage? What kind of economics and market forces are hidden behind this? This article will explore this issue in depth and analyze the mysterious linkage phenomenon between Bitcoin and U.S. stocks.

The linkage between Bitcoin and U.S. stocks is not accidental, but is affected by a variety of factors. First, the emotional fluctuations in the global market will affect the performance of Bitcoin and U.S. stocks to a certain extent. For example, when the global economy faces uncertainty, investors tend to transfer funds from the stock market to safe-haven assets such as gold and Bitcoin to avoid risks. This emotional transmission effect leads to the linkage between Bitcoin and U.S. stocks.

In addition, changes in macroeconomic policies will also have an impact on Bitcoin and U.S. stocks. For example, the Federal Reserve's monetary policy adjustments and the implementation of fiscal stimulus plans may have a significant impact on the market, thereby affecting the price trend of Bitcoin and U.S. stocks. The intervention of such policy factors has made the linkage between Bitcoin and U.S. stocks closer.

In addition, technological innovation and market development are also one of the important factors affecting the association between Bitcoin and U.S. stocks. With the continuous development and application of blockchain technology, Bitcoin, as its representative digital currency, has attracted more and more investors' attention. To some extent, the performance of the Bitcoin market also reflects the impact of technological innovation on the entire market, and is closely related to the development of the U.S. stock market.

In addition, the global market environment has also contributed to the linkage between Bitcoin and U.S. stocks. With the interconnection of global capital markets, the correlation between various assets is also increasing. As a global digital asset, Bitcoin's price fluctuations are often affected by the global market, and the performance of U.S. stocks, as one of the world's largest stock markets, will also have an impact on other assets, thus forming a linkage relationship between Bitcoin and U.S. stocks.

In general, the linkage between Bitcoin and U.S. stocks is not caused by a single factor, but the result of a combination of factors. From emotional fluctuations, policy changes, technological innovation to the global market, various factors are intertwined to affect the price trend of Bitcoin and U.S. stocks. In the future, as the market environment continues to change and develop, the linkage between Bitcoin and U.S. stocks will continue to attract attention and may present new characteristics and rules.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

As we all know, the COVID-19 epidemic has brought a crisis to the world’s economy. Since the outbreak of the COVID-19, the trends of Bitcoin and U.S. large-cap stocks have slowly begun to synchronize, and this closer correlation may mean that financial stability is facing a crisis. risks of. We know that crypto assets are no longer on the fringes of the financial system. The correlation between Bitcoin and the S&P 500 Index is now increasing, even surpassing stocks and gold. Before the outbreak of the new coronavirus, the correlation coefficient between Bitcoin and the daily fluctuations of U.S. stocks was only 0.01. Many investors don’t know why Bitcoin is linked to U.S. stocks? Let the editor of the currency circle talk about it below.

 Why is Bitcoin linked to US stocks?

The trend of Bitcoin is getting closer and closer to that of the U.S. stock market, and it has recently faced downward pressure following the U.S. stock market. Last weekend, Bitcoin fell below the US$30,000 mark, almost halved from its historical high of US$68,990 in November 2021. The reasons include the fact that Bitcoin faces regulatory pressure from many governments, leading to crazy market selling.

The Wall Street Journal, CNN and other foreign media reported that according to CoinDesk data, Bitcoin fell below US$37,000 on January 22, hitting a new low since August 2021. On the 23rd, it retreated to below US$35,000, and then rebounded. to above $35,000, settling at $35,534.91 at 10:43 am on January 24. Since the beginning of 2021, the price of Bitcoin has plummeted 22.70%.

In anticipation of the U.S. Federal Reserve (Fed) raising interest rates, U.S. stocks have encountered considerable selling pressure in the short term, especially growth stocks such as technology stocks with high price-to-earnings ratios. On January 21, the Nasdaq index, which is dominated by technology stocks, closed at 13,768.92 points, pulling back more than 10% from its historical high on November 19, 2021 (16,057.44 points), meeting the definition of a correction.

Clara, head of research at digital asset data provider Kaiko
Medalie noted: “Cryptocurrencies are no longer isolated risk assets but will reflect global policy changes.” “As market liquidity tightens, it is not surprising that stock market and cryptocurrency volatility become more volatile.”

According to Kaiko, the correlation between Bitcoin and stock market trends is close to a new high since September 2020. In other words, as the stock market continues to weaken, Bitcoin will also fall.

 Bitcoin decoupled from US stocks

The U.S. Treasury Department said it prohibits Americans from participating in any transactions involving the Russian Central Bank, the National Wealth Fund or the Treasury Department. Senior Biden administration officials say U.S. sanctions against the Russian central bank have been planned for months and we are ready. We will continue to expand the scope of our measures to ensure a stable energy supply. As long as Putin continues his actions in Ukraine, our strategy is to ensure that Russia's economy goes backwards.

In addition, the United States remains in close contact with the European Union to determine the list of Russian banks that will be excluded from SWIFT (bank settlement system).

Canadian Prime Minister Trudeau said that Canada will ban transactions with the Russian Central Bank; British Foreign Secretary Truss said that we are studying ways (Russia) can be used to undermine sanctions, including cryptocurrency.

Separately, the Biden administration is asking crypto exchanges to help ensure that Russian individuals and organizations do not use virtual currencies to circumvent sanctions imposed on them by Washington, according to people familiar with the matter.

Therefore, the situation between Russia and Ukraine is likely to trigger a series of economic problems, thereby increasing the volatility of the financial market.

In this context, the safe-haven asset properties of cryptocurrencies have been strengthened and have become a favored product by the market. This is why cryptocurrencies can still rise independently after being highly correlated with U.S. stocks and re-decouple from U.S. stocks. reason.

The above is the specific analysis of the editor of the currency circle on why Bitcoin is linked to the US stock market. In fact, cryptocurrencies have already shown an upward trend before this. This time, the holdings of Bitcoin ETFs have increased significantly, and various Bitcoin addresses have reached new highs. We can see the market size of Bitcoin. It is constantly expanding and market demand is also surging. Since the beginning of 2022, the growth of this indicator has reached a peak and reached a new all-time high, now reaching 402,76163. Cryptocurrencies are becoming an important safe-haven asset in the context of turbulent international situations, which also provides a good foundation for the rise of cryptocurrencies.