Original | Odaily Planet Daily (@OdailyChina)
Author | Wenser (@wenser2010)
"It's limit up again!"
"It has already risen by more than 130 points!"
"A web novel author All In A-shares, earned more than 3 million RMB and directly stopped writing!"
"A certain new stock starting with CL has already risen more than 17 times today, isn't this more terrifying than the MEME coins on SOL?"
"Someone earned 520,000 RMB in the morning, and there are also statistics showing that A-share investors earned an average of 47,000 RMB in 4 days!"
With the Federal Reserve taking the lead in cutting interest rates, the global market has ushered in a rare "flood of liquidity" again, and the A-shares have also started a new round of "reclaiming lost ground" under the stimulus of multiple favorable policies from the central bank - according to reports, on September 30, the trading volume of the A-share market exceeded 25 trillion RMB, setting a new historical record; previously, the trading volume exceeded 1 trillion RMB in just 35 minutes, refreshing the "fastest 1 trillion record" in history. The crazy market is attracting more and more investors to join, and many cryptocurrency practitioners have openly claimed that "they have already withdrawn a large amount of funds, with the target directly pointing to the A-share limit up board". On the other hand, the relationship between cryptocurrencies and the US stock market is also becoming increasingly stronger - according to previous data from IntoTheBlock, the correlation between BTC and the US stock market reached the highest level since Q2 2022 last week. After the approval of the BTC spot ETF and the ETH spot ETF, the above situation is also a side reflection of the further deepening of the coupling degree between the traditional financial market and the cryptocurrency industry.
Odaily Planet Daily will review the key nodes of BTC price movements this year in this article, and take a glimpse of the correlation between BTC, as the "wind vane" of the cryptocurrency, and the performance of the US stock market and A-shares in different periods.
Back to 2024: BTC Price Key Nodes VS Performance of US Stocks and A-Shares
At the beginning of the year, the milestone event of "BTC spot ETF approved by the US SEC" became the best interpretation of the accelerated mainstreaming process of the cryptocurrency industry. Looking back at BTC's performance since January this year, although it experienced several months of volatility and multiple price declines after breaking new highs, compared to other investment targets during the same period, it still belongs to the category of "quality assets and safe-haven assets". The following is a review of the key points of BTC from January to September this year and the corresponding performance of the US stock market and A-shares:
January 11 - BTC Spot ETF Officially Approved
On January 11, local time, the US SEC officially approved several BTC spot ETF funds, thus unveiling a new process of "cryptocurrency mainstreaming". Although the news was "prematurely leaked" due to the hacking of the official account of the US SEC X platform two days earlier, the price of BTC reacted relatively calmly after a slight previous increase, but it was still in a "stable and improving" situation, laying a solid foundation for the subsequent breakthrough to a new historical high. For more information, see《Historic Moment: BTC Spot ETF Finally Approved, Will the Crypto Floodgates Opening Be the Start of a New Bull Run?》.
At that time,
BTC price was around $46,632;
The Shanghai Composite Index was around 2,881 points;
The Dow Jones Industrial Average was around 37,584 points.
BTC price
Shanghai Composite Index
Dow Jones Industrial Average
March 14 - BTC Sets a New High, "No Longer Owe Anything to Anyone"
On March 14, with the continuous inflow of funds into the BTC spot ETF, the investment enthusiasm of US stock investors in BTC was increasingly high, and the cryptocurrency industry was immersed in the optimistic atmosphere of the "crypto bull market". The Solana MEME coin craze also began to emerge, and many previously raised hundreds of millions or even billions of dollars in star projects were also ready to go, preparing for TGE and listing on top exchanges. In the midst of this positive trend, the price of BTC broke through the previous high and finally exceeded the historical high of around $69,000 on the 14th, and continued to rise to over $73,000.
At that time,
BTC price was around $73,097;
The Shanghai Composite Index was around 3,036 points;
The Dow Jones Industrial Average was around 38,888 points.
BTC price
Shanghai Composite Index
Dow Jones Industrial Average
April 20 - The Halving Arrives, the Result is Surprising
On April 20, BTC successfully completed its fourth halving. Before the halving, there were many different opinions on the price of BTC. Some believed that the BTC halving would promote a rapid short-term rise in the price of BTC; others believed that the BTC halving would lead to a sharp drop in BTC mining revenue and miners' income. The story we all know later: the price of BTC did not rise rapidly, and even fell below $60,000 afterwards; the miners' income did not plummet, but instead benefited from the growth of projects such as Rune in the BTC ecosystem and once hit a new daily high. For more information, see《BTC Completes the Fourth Halving in History, How Do Various Institutions Predict the Future Market?》,《After the Halving, BTC Network Congestion, Gas Fees Soar to Thousands of Dollars Due to Rune Scramble》.
At that time,
BTC price was around $63,988;
The Shanghai Composite Index was around 3,066 points;
The Dow Jones Industrial Average was around 37,918 points.
BTC price
Shanghai Composite Index
Dow Jones Industrial Average
May 12 - BTC First Crashed and Then Rose, Regional Political Situation Influence Gradually Increased
In early May, after experiencing a flash crash on the 1st and 2nd, the price of BTC gradually stabilized and rose to around $60,000, but at the same time, the increasing tensions in the Middle East region and the highly volatile political situation caused by the US presidential election cast a shadow over the development of the cryptocurrency market as well as the traditional financial market. However, compared to the "disappointment and even despair in the volatile market" in July and August, most cryptocurrency investment institutions and industry leaders were still optimistic about the market at that time. For more information, see《 3-Minute Review of BTC Market Outlook: Heading Towards... in the Volatility?》.
At that time,
BTC price was around $60,776;
The Shanghai Composite Index was around 3,144 points;
The Dow Jones Industrial Average was around 39,422 points.
BTC price
Shanghai Composite Index
The Dow Jones Industrial Average
August 5 - BTC fell $15,000 in 4 days, the market is in a state of panic
On August 5, around 2 pm, according to OKX market data, the BTC price once fell to $48,934.8, a 24-hour drop of 15%, and a drop of $15,000 in 4 days, creating the largest drop of the year up to that point, plunging the cryptocurrency market into extreme panic. Looking back, the panic at the time was undoubtedly due to the huge pressure of the global macroeconomic downturn, with the US stock market falling by nearly $3 trillion in a single night, equivalent to 2.5 times the cryptocurrency market. This event once again verifies that: the cryptocurrency market is increasingly closely linked to the global economic market, and the performance of the two markets is closely related. As the old saying goes: "under the collapsed nest, there is no complete egg", the cryptocurrency market is also difficult to be self-sufficient. For more information, please refer to the article "BTC fell $15,000 in 4 days, the global financial market plunged into panic".
At that time,
the BTC price was around $53,956;
the Shanghai Composite Index was around 2,860 points;
the Dow Jones Industrial Average was around 38,687 points.
BTC price
Shanghai Composite Index
Dow Jones Industrial Average
September 20 - The Fed "unprecedented" cut interest rates by 50 basis points, the world welcomes a "flood of liquidity"
At 2 am on September 19, the Fed announced the start of the interest rate cut cycle, lowering the federal funds rate by 50 basis points to 4.75% -5.00%, the first rate cut since March 2020. Subsequently, the global market rose in unison, and China also subsequently introduced a series of favorable policies, including interest rate cuts, reserve requirement ratio cuts, and measures to stimulate the investment market. The "national team" has spent hundreds of billions to boost confidence in the capital market. The recent sustained rise in the A-share market is the best illustration, and the "index-level rising K-line" of the Shanghai Composite Index now appears to be extremely steep, which is highly consistent with the "To Da Moon" curve that the cryptocurrency industry has always advocated.
At that time,
the BTC price was around $63,128;
the Shanghai Composite Index was around 2,739 points;
the Dow Jones Industrial Average was around 42,063 points.
BTC price
Shanghai Composite Index
Dow Jones Industrial Average
Conclusion: The correlation between the cryptocurrency market and the traditional financial market is gradually strengthening
Looking back at the price trends of BTC, the Shanghai Composite Index, and the Dow Jones Industrial Average so far this year, we can clearly draw the following conclusions:
- After the approval of the BTC spot ETF, the hedging asset attribute of BTC has weakened to a certain extent compared to gold;
- After the approval of the BTC spot ETF, the price trend of BTC is more affected by the overall trend of the Dow Jones Industrial Average, rather than the other way around;
- BTC spot is more sensitive to macroeconomic conditions and geopolitical factors due to its 7*24 hour trading flexibility, and its volatility is much greater than the stock and A-share markets;
- Compared to the Shanghai Composite Index, which has long maintained a range of 2,800-3,100 points, the Dow Jones has shown a more obvious upward trend, rising from around 37,000 points at the beginning of the year to around 42,600 points recently, an increase of about 15%; the price of BTC has risen from around $42,000 at the beginning of the year to around $64,000 now, an increase of about 52%, which can be called the "best investment target of the year";
- In the long run, although the current size of the cryptocurrency market (according to Coingecko data, the current total is $2.36 trillion) is far less than the trading volume of the A-share and US stock markets, which can reach tens of trillions or even hundreds of trillions of dollars, it may still exist to a certain extent "mutual blood-sucking" possibility, including the Hong Kong virtual currency ETF and the US ETF fund channels have opened the entrance for traditional financial market funds to flow in, but at the same time may also lead to the further outflow of the already scarce liquidity in the cryptocurrency market.
For the cryptocurrency industry, how to introduce more real-world assets and the huge liquidity of the traditional financial market through ecosystem construction, narration, application, market, and consumption, is an "industry-level difficulty" that practitioners cannot avoid. Mass Adoption may not be urgent, but attracting more capital inflows is the top priority.
Information source:
BTC price data: Coingecko website
Shanghai Composite Index data: Sina Finance
Dow Jones data: Sina Finance - US Stock Quotes
