Recently, the decline of Bitcoin has triggered a broad drop in the cryptocurrency sector of the U.S. stock market before trading, with companies like Coinbase and Riot Platforms seeing their stock prices fall. This phenomenon is backed by multiple interconnected logics.
From the perspective of asset attributes, Bitcoin is often categorized as a risk asset, sharing a similar 'temperament' with technology stocks and other risk assets in the U.S. stock market. When the economy faces uncertainty, investors tend to sell off risk assets in search of safety, leading to Bitcoin's price being the first to come under pressure and subsequently dragging down the cryptocurrency sector in the U.S. stock market due to this shift in risk appetite.
Market sentiment transmission also plays a role in exacerbating the situation. A decline in Bitcoin's price can trigger a panic selling wave in the cryptocurrency market, and this panic sentiment can easily transmit from the virtual economy to the real economy, causing cryptocurrency stocks in the U.S. stock market to drop as well. Whether through rational stop-loss actions by investors or irrational blind selling, this further intensifies the downward trend, creating a negative cycle.
Direct business connections are also a key factor. Cryptocurrency trading platforms like Coinbase and mining companies like Riot Platforms are deeply tied to Bitcoin. When Bitcoin's price declines, the trading volume of these platforms is often affected, and the profit expectations of mining companies may also decrease, directly impacting the stock prices due to changes in the companies' fundamentals.
