Although Bitcoin and stocks are two different types of assets, in recent years, their price movements have started to show a certain degree of 'correlation.' This means that under certain economic conditions, Bitcoin and stocks may rise or fall together.
When the market is optimistic and capital is abundant, investors are more willing to take on risk. Assets like tech stocks and Bitcoin are likely to be sought after, causing their prices to rise together. Conversely, when the market is volatile or the economic outlook is uncertain, investors tend to seek safe havens, leading to a simultaneous decline in the prices of these assets.
Particularly after the pandemic, as the global market entered a period of 'loose monetary policy,' the trends of Bitcoin and US tech stocks became more synchronized. This is because institutional investors began to include Bitcoin in their asset allocations, making its performance more like a part of the traditional market.
However, Bitcoin still possesses some unique characteristics. For example, it is not controlled by a central bank, has a limited supply, and is traded 24/7 without interruption. These features can cause its performance to diverge from the stock market in certain situations.
In summary, while there is a certain correlation between Bitcoin and the stock market, they are not completely synchronized. Understanding these relationships can help newcomers view crypto assets from a more macro perspective.
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