Why are Crypto Prices Affected by Stocks?

Suba · Jul 5, 2023

In 2009 or when Bitcoin was launched many people thought that the price of Bitcoin would be independent and could not be intervened by other parties and would never correlate with other commodity assets, so it was purely determined by supply and demand factors. In fact, many people make Bitcoin a safe haven and are dubbed digital gold.

Time goes on and changes in crypto market conditions and slowly the performance of stocks is connected with the performance of cryptocurrencies. Since the beginning of 2018, many crypto lovers have begun to feel that there is a connection between crypto and stocks and Bitcoin also behaves like stocks, perhaps both are high-risk investment instruments. However, there are several conjectures or reasons, why is there a link between crypto and stocks (especially US stocks)?

riberet19 · Jul 6, 2023

I think this is because many institutional investors entered the crypto market who buy and sell cryptocurrencies also looking at the behavior of traditional stock exchanges, macroeconomic conditions, monetary policies and current market sentiment, these investors who are really the ones who manage the market, see cryptos as a risk asset and act accordingly.

Bisolami · Jul 9, 2023

riberet19 said:
I think this is because many institutional investors entered the crypto market who buy and sell cryptocurrencies also looking at the behavior of traditional stock exchanges, macroeconomic conditions, monetary policies and current market sentiment, these investors who are really the ones who manage the market, see cryptos as a risk asset and act accordingly.

Can we also say that one of the things that affected it is because some people do not want to have a long-time investment in cryptocurrency. They just want to invest for a short time and make money

riberet19 · Jul 9, 2023

Bisolami said:
Can we also say that one of the things that affected it is because some people do not want to have a long-time investment in cryptocurrency. They just want to invest for a short time and make money

That is normal, that happens in all markets, there are long-term operators and short-term operators, generally prices move more thanks to short-term operators who are the ones who move the highly liquid supply.

Bisolami · Jul 9, 2023

riberet19 said:
That is normal, that happens in all markets, there are long-term operators and short-term operators, generally prices move more thanks to short-term operators who are the ones who move the highly liquid supply.

The short-term operators are the ones who buy and sell almost all the time so they should be the one who determine the price but not directly. Their actions will only determine the price of cryptocurrency

Golden9 · Jul 10, 2023

The markets are mostly traded by the same or similar group of people, and people have learnt that the markets often move together, since the same economic factors usually affect them.

Bisolami · Jul 10, 2023

Golden9 said:
The markets are mostly traded by the same or similar group of people, and people have learnt that the markets often move together, since the same economic factors usually affect them.

This is one of the things that made me believe that we are still the ones who determine the price of a particular coin. Since we are trading, our demand and supply will determine the price.

sofiko · Jul 10, 2023

Cryptocurrency prices can be affected by stocks because stocks can cause certain emotional or reactive movement among investors. For example, the publication of positive news or announcements of companies using or supporting cryptocurrency can increase demand and raise prices. The reverse situation is also possible, when negative news or regulation by relevant authorities can cause prices to fall. Stocks can affect the general mood of investors and market perception, which can have an impact on the price dynamics of cryptocurrencies.

Bisolami · Jul 10, 2023

sofiko said:
Cryptocurrency prices can be affected by stocks because stocks can cause certain emotional or reactive movement among investors. For example, the publication of positive news or announcements of companies using or supporting cryptocurrency can increase demand and raise prices. The reverse situation is also possible, when negative news or regulation by relevant authorities can cause prices to fall. Stocks can affect the general mood of investors and market perception, which can have an impact on the price dynamics of cryptocurrencies.

I still do not know how stocks and the price of cryptocurrency relate even though a lot of people talk about it. I only know that it is mostly affected by the demand and supply of the coin

Why are Crypto Prices Affected by Stocks?

Suba

Notable

riberet19

Notable

Bisolami

Very Familiar

riberet19

Notable

Bisolami

Very Familiar

Golden9

Notable

Bisolami

Very Familiar

sofiko

Complete Stranger

Bisolami

Very Familiar

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