Last night, I talked about some US stocks, technology stocks and the trends of BTC and ETH in Space. This morning, the financial reports of Microsoft and Google happened to be announced. I can talk about this topic in more detail. First of all, for friends in the currency market, should we look at US stocks? Is there any correlation between US stocks and the price trends of BTC and ETH? I think this is the issue that many friends are most concerned about. Since last week, I have been discussing with My friends emphasized that this week is the financial report of key technology stocks. The main content of the financial report not only affects the trend of the corresponding stocks, because leading technology stocks currently account for a large proportion of the Nasdaq 100 Index and the S&P 500 Index, so Changes in leading technology stocks will still affect the overall trend of US stocks, and even affect the judgment of the industry.
This is the premise, and the reason why we talk about this premise is that we have to go back to 2020. Yes, it may be beyond the expectations of many friends. For a long time in the past, the synchronization of the currency market and technology stocks was considered It started in the second half of 2021, but in fact the highest and longest synchronization time started in early 2020. The picture shows the correlation between the Nasdaq 100 Index and BTC. I made a mark, where blue The position of the color box is when the synchronization exceeds 50%, the bottom is 50%, and the top is 100%. The peak synchronization does not exceed 95%, but it can be clearly seen from March 2, 2020 to 2021 For more than a year on April 26, the price trend of BTC and the long-term trend of the Nasdaq 100 Index remained above 70%.
What does this mean? It means that when the Nasdaq 100 index rises or falls, BTC will also rise and fall, and nearly 70% of the rise and fall are the same. This is the focus of synchronization, and then as we all know During the 519 incident, we can see that the synchronization between BTC and the Nasdaq 100 Index during this period was in a low synchronization state until September 21, 2021, and even from June 1, 2021 to The synchronicity is negative during August 30, 2021, which means that the rise or fall of technology stocks has nothing to do with BTC. Of course, this period is still very short, and the next turning point will begin in 2021 After the BTC spot ETF in October, the price trends of the Nasdaq 100 Index and BTC were at synchronized highs until August 22, 2022.
Next until 2023, we can see that the last high correlation was from February 13 to July 17. The synchronized history of this cycle tells us that although there may be a period of time between BTC and Nas The Dak 100 Index will be out of sync, but in the recent big cycle, the synchronization time will be higher than the out-of-sync time. It is true that there will be some time when the rise and fall of technology stocks have nothing to do with BTC, or even follow the decline but not the rise. The situation arises, but there will be a lot of time when the rise and fall of technology stocks will affect the prices of BTC and ETH, and in most weeks, the rise and fall of technology stocks are in sync with the prices of BTC and ETH. This This means that if technology stocks rise during the week, then BTC and ETH will probably rise as well, but the extent of the rise is not very high.
Of course, the same goes for declines, but in recent times, because AI has driven technology stocks out of the bullish state of raising interest rates, it is rare to see long-term corrections, and most of them are upward trends. However, what needs to be emphasized here is that the synchronization trend we are currently looking at is based on weekly units. If it is changed to daily units, this data will not be friendly enough. Before May 10, 2023, although synchronicity will occasionally appear In the case of negative values, the odd majority are still positive, indicating that the rise and fall of technology stocks are positively correlated with the price of BTC. However, since May 10th, there has been a negative correlation, accounting for the majority. The only positive correlation is from 6 The period of the month from July 17th to July 18th. Are any of you familiar with this time?
This time is the time when BlackRock (BlackRock) applies for a BTC spot ETF (trust), and the month it lasts is likely to be the "patience zone" for investors who keep pace with technology stocks. This range is what we give to BlackRock. Ryder’s application for ETF pricing has dropped from the earliest US$6,000 (corresponding to BTC of US$32,000) to US$5,000 (corresponding to US$31,000 of BTC), to US$4,000 (corresponding to US$30,000 of BTC), and is currently fixed at US$3,000 (corresponding to US$30,000 of BTC). BTC29,000 USD), this trend can be seen falling in synchrony with the Nasdaq 100 Index. At this point, many friends should already know it.
The reason why BTC and the Nasdaq 100 index are synchronized is because many of the investors behind the orders are the same. When they are synchronizing, they look at BTC and ETH like they look at technology stocks, whether they are buying or selling. All will follow the same style, and this is not just the style of one or two investors or one or two institutions, but involves almost all investors on Wall Street. Only then can we have a synchronicity of up to 95%, but with various Although the occurrence of the event will reduce synchronicity, it will still maintain a certain "equal investment" approach. However, this approach will end in April 2023, and it will fall into negative synchronization for nearly four months. There are two reasons for this.
The first one is Ai from technology stocks. I don’t need to say much about the strength of Ai. Even in China, everyone from 99% to 99% knows about Ai, and even those who have just learned how to walk know about it and are talking about it. This kind of popularity It will inevitably bring about an influx of funds. The last time the currency market had such an opportunity was when BlackRock applied for an ETF. The last time it was approved was the BTC futures ETF, and the last time it was Coinbase’s listing, and then It is the halving cycle of BTC. There is a common point here that everyone cannot ignore, that is, except for the halving cycle, events that can drive the price of BTC almost all occur in the United States, dominated by economic entities in the United States, while the dynamics of other countries and regions have recently In a cycle, it may affect the currency price trend in the short term, but it will not in the long term.
Another reason that affects the synchronization of BTC and the Nasdaq 100 Index is the popularity of Meme coins. Many friends may not take it seriously, thinking that this is an inevitable stage of the development of the currency market, and Meme coins also have their own culture and wealth creation effects. , but in fact, investment in the currency market itself is not supported by financial reports and performance like stocks. It almost all relies on imagination, and we have also talked about the currency market before. Due to regulatory reasons, whether companies make money and currency prices There cannot be a direct relationship with the trend of the currency, which results in the judgment of price relying more on information, and FUD is also a kind of information, and Meme coins don’t even need information, they just rely on one’s mouth. This kind of Investment and the wealth creation effect it brings are actually not much different from gambling.
Whether you believe it or not, the data is here. After the Meme currency broke out in April, a large amount of funds began to be withdrawn from the currency market. The market value of USDC, which had just eased from the explosion of Silicon Valley Bank, has been declining at an accelerated rate until now. status, and starting from April, the market value of USDT, which had been increasing significantly before, has also been reduced from an increase of 400 million to 500 million US dollars per week to an increase of only 100 million to 200 million US dollars in the Americas. The reason for the decrease Not only because of the chaos of Meme currency and the impact of Ordinals on BTC, but more importantly, Ai has let more investors see through its financial reports that this is the future and this is the future worth investing in.
I have also written a tweet before, saying that Wall Street institutions are very high-spirited when introducing and investing in AI. They can talk about it anytime and anywhere. It is an investment that can be put on the table. Compared with BTC, it is still We can see resistance from many mainstream institutions and traditional investors, and investment in the currency market has never been on the table. Especially after the explosion of FTX, investors who had just begun to have a good impression of the currency market began to Withdrawal of investment and exit, and the increasingly strengthened supervision by the SEC and CFTC are also the main reasons that hinder investors and market makers from entering the market. Under the ebb and flow of one another, the best solution in venture capital is technology stocks, and the most secure solution It’s U.S. bonds, and the currency market has also started to move further and further away from technology stocks, the Nasdaq 100, and even the S&P 500 because of the massive withdrawal of U.S. funds.
Up to this point in the long discussion, some friends should still be asking questions. After you have said so much, are BTC and technology stocks synchronized? Are technology stocks useful as a reference when predicting the price trend of BTC? Will the financial reports of technology stocks be Affects the price movements of BTC and ETH. Let me answer now. According to the data I have obtained, as of today’s post-closing correlation of U.S. stocks, the synchronicity of the Nasdaq 100 Index, which represents technology stocks, has dropped to about negative 30%, which is in sync with the S&P 500. The synchronicity with the Dow Jones Industrial Index has dropped to about minus 50%, and the synchronicity with the Dow Jones Industrial Index has dropped to about minus 65%. This means that the short-term trend of U.S. stocks has nothing to do with the currency market, and even the U.S. stocks are rising. , BTC and ETH fell further. So at least from now on, except for specific times, US stocks have almost no impact on BTC and ETH.
But the premise is a specific time, and this excluded specific time is the financial reporting season. The conclusion we spent thousands of words on is that investors in technology stocks still have a strong connection with BTC and ETH. The possibility of synchronized operations within time is very high. BlackRock’s application for ETF is a good example. Wall Street investors have not completely abandoned BTC and ETH, but they have not yet had the opportunity. After all, US stocks have Ai, and even Driven by AI, sector rotation has begun to appear, and the currency market is still just a piece of chicken feathers. If the stock market makes more money, it is possible to advance the layout of sectors that have not yet been rotated, and the currency market is this sector that has not yet been rotated. Moving plates.
The final conclusion is that for U.S. stocks, we need to understand the current hot spots and understand the direction of funds. Although it may not directly reflect the price trends of BTC and ETH in the short term, nor will it provide too much guidance on the price trends of BTC and ETH, but There is still a strong consistency between current position holders and investors. When key events occur, there is still a high possibility of operational synchronization. This consistency can not only be reflected in financial reports, but more importantly, it may This is reflected in the Fed's monetary tightening attitude. Tomorrow at 2 a.m. Beijing time is the Fed's interest rate meeting. More people will look forward to it and analyze every word that Powell said, hoping to determine whether it is correct. The Federal Reserve has ended this interest rate hike.