Bitcoin and US technology stocks, in-depth analysis of the rise and fall together
In recent years, the relationship between Bitcoin and US technology stocks Price trend Showing amazing synchronicity, especially during market booms or violent fluctuations, the phenomenon of ‘rising and falling together’ becomes more prominent.
As the cryptocurrency with the highest global market value, Bitcoin is often seen as a high-risk asset, highly correlated with the Nasdaq 100 index, which represents technology stocks. At the beginning of 2025, this trend reappeared amid market turbulence caused by the new tariff policy of the Trump administration.
This article will analyze in detail the reasons why Bitcoin and US technology stocks rise and fall together, the driving factors behind them, the current empirical data, and the possible development paths of this trend in the future, providing investors with comprehensive investment references.
The reasons why Bitcoin rises and falls together with US technology stocks
1. The Commonality of Risk Assets
Bitcoin and US technology stocks are classified by the market as ‘Risk-On Assets.’ Technology stocks, especially the ‘Magnificent Seven’ - Apple, Microsoft, Amazon, Google, Meta, Tesla, Nvidia - attract a large amount of speculative capital due to their high growth potential and sensitivity to the economic cycle. Similarly, Bitcoin, as a highly volatile digital asset, is favored by risk-seeking investors for its potential high returns.
During economic expansion or high market optimism, investors are often willing to put money into these high-risk assets, driving the simultaneous rise of Bitcoin and tech stocks prices.
For example, the loose monetary policy after the 2020 COVID-19 pandemic has led to a bull market in technology stocks and Bitcoin, with Bitcoin soaring from $10,000 to $69,000, while the Nasdaq index has risen by over 50% during the same period. Conversely, in times of increased economic uncertainty (such as the Fed’s rate hike in 2022), investors tend to sell off risky assets, leading to a simultaneous decline in both prices.
2. Macro drivers of liquidity
Global liquidity and US monetary policy are the core drivers of Bitcoin and tech stock price fluctuations. The Fed’s interest rate policy directly affects market funding costs and investor confidence. For example:
Rate hike cycle: In 2022-2023, the Fed raised interest rates continuously, causing Bitcoin to fall from $69,000 to $16,000, while the Nasdaq index fell by about 33% during the same period. High interest rates increase the opportunity cost of holding non-income assets (such as Bitcoin) and overvalued tech stocks.
Rate cut expectations: The optimistic market expectations for a rate cut by the end of 2024 have driven Bitcoin back above $80,000, and tech stocks have also rebounded due to capital inflows.
As of April 8, 2025, the global tariff policy introduced by the Trump administration (imposing 10%-20% tariffs on major trading partners) has raised concerns in the market about economic recession and expectations of liquidity tightening, which temporarily dragged down Bitcoin and tech stocks. However, after a brief decline, Bitcoin quickly rebounded to $78,500, while tech stocks remained constrained by profit pressure, showing subtle differences in the short term.
3. Investor behavior overlaps with group behavior
Investor groups in Bitcoin and US technology stocks have significant overlap, including retail investors, hedge funds, and institutional players:
Institutional Participation: MicroStrategy has accumulated over 200,000 Bitcoins since 2020, considering them as “corporate treasury assets,” while Tesla also held Bitcoin in 2021. The actions of these tech-related companies directly link Bitcoin to the tech stock market.
Retail traders: Individual investors trade technology stocks and Bitcoin simultaneously through platforms such as Robinhood and Coinbase. When technology stocks rise due to earnings seasons or technical breakthroughs, some profits may flow into the Bitcoin market, and vice versa.
Sentiment Transmission: The hot discussions on social media (such as X) often link the topics of Bitcoin and technology stocks. For example, at the beginning of 2025, the remarks supporting Bitcoin’s strategic reserve by Trump sparked heated discussions and also boosted the innovation expectations of technology stocks.
4. Market Structure and Algorithmic Trading
Algorithmic trading and high-frequency trading (HFT) in the modern financial markets have further amplified the correlation between Bitcoin and tech stocks. Many quant funds use models based on risk exposure while trading Bitcoin futures (such as CME Bitcoin Futures) and technology stock ETFs (such as QQQ). When market volatility triggers stop-loss or chasing logic, the trends of Bitcoin and technology stocks are often ‘linked’.
Empirical data and case analysis at the beginning of 2025
Current market performance
As of April 8, 2025, the correlation between Bitcoin and US tech stocks has once again been evident in the volatility caused by Trump’s new tariff policy.
Tariff Impact: At the end of March, Trump announced tariffs on the European Union, China, and others. The Nasdaq index fell by 4.2% within a week, and Bitcoin simultaneously dropped below $80,000 to $76,300.
Short-term rebound: In early April, Bitcoin rebounded to $78,500, showing some resistance to falling, while tech stocks continued to be under pressure due to corporate profit warnings (such as the impact of tariffs on NVIDIA’s supply chain), with the Nasdaq index rising only slightly by 0.8%.
Relevance Data
According to Bloomberg data, the 52-week correlation coefficient between Bitcoin and the Nasdaq 100 index has remained in the range of 0.6-0.8 since 2020.
Throughout 2024: the average correlation coefficient is 0.72, indicating a high positive correlation.
Q1 2025: the correlation coefficient slightly decreased to 0.65, possibly reflecting the emerging safe-haven properties of Bitcoin amid the tariff crisis.
Technical analysis
Bitcoin: The 50-week moving average ($77,250) has become a key support. If this level is held, further consolidation of independence may be possible. The RSI (Relative Strength Index) is currently at 58, not entering the overbought zone.
Technology stocks: The Nasdaq 100 index is fluctuating around 19,500 points, and the 20-day moving average has been broken, indicating short-term weakness.
3. Future trend prediction of rising and falling together
- Possible differentiation
Although Bitcoin is currently highly correlated with tech stocks, signs of differentiation may emerge by 2025:
Bitcoin’s safe-haven properties: With increasing institutional adoption (such as the US Treasury exploring Bitcoin as a strategic reserve), Bitcoin may gradually be seen as ‘digital gold,’ weakening its correlation with tech stocks.
For example, in early 2025, US Treasury Secretary Scott Bessent said, “Bitcoin is a store of value that can hedge against fiscal expansion risks.”
Independent pressure on tech stocks: If tariff policies continue to impact the global supply chain, tech stocks may enter a period of adjustment due to declining profits, while Bitcoin may attract safe-haven funds due to its “anti-censorship” characteristics.
- The impact of policies and market sentiment
The encryption policy of the Trump administration will be a key variable:
Bullish on Bitcoin: If the Bitcoin strategic reserve plan is implemented (aiming to hold 1 million BTC), it will directly boost demand and decouple from the trend of technology stocks.
Tech stocks under pressure: The trade war may weaken the export market and profit margins of technology companies, especially Apple and NVIDIA, which rely on globalization.
In addition, the interest rate path of the Federal Reserve in 2025 is crucial. If the rate cut cycle begins, Bitcoin and tech stocks may see a new round of rise together; if high rates are maintained, both may continue to be under pressure.
- Technology-driven differentiation
Bitcoin halving effect: The fourth halving in April 2024 has reduced the daily new issuance of BTC to 450 coins, and the reduced supply may provide independent upward momentum for Bitcoin.
Technology stocks valuation adjustment: The price-to-earnings ratio (P/E) of the ‘Magnificent Seven’ has exceeded the historical average. If the AI boom cools down or profits fall short of expectations, tech stocks may enter a bear market, while Bitcoin may remain resilient due to its scarcity.
Four, Investment Strategies and Recommendations
Short-term trading opportunities
Arbitrage linkage: Taking advantage of the high correlation between Bitcoin and technology stocks to capture synchronous fluctuations during the technology stock earnings season or after the Fed’s decision. For example, if Nvidia’s earnings exceed expectations, pay attention to the opportunity for Bitcoin to rise.
Band operation: When Bitcoin fluctuates in the range of $77,000-80,000, you can buy low and sell high; while technology stocks should focus on the support level of 19,000 points on the Nasdaq.
Long-term asset allocation
Hedging combination: using Bitcoin as a hedge against the volatility of technology stocks. If optimistic Web3 Growth, can hold QQQ and BTC at the same time.
Risk diversification: Avoid over-concentration on a single asset, balance risk exposure by combining with gold or bonds.
Risk Management
Macroeconomic monitoring: Pay attention to the Fed interest rate decision, progress on tariff policies, and US economic data (such as CPI, unemployment rate).
Technical indicators: If Bitcoin falls below $77,250, it may further test $70,000; If the technology stocks fail to hold 19,000 points, be to ic risks.
5. Summary
Bitcoin and US technology stocks rise and fall together, due to their commonality as risk assets, macro-driven liquidity, and the interconnectedness of investor behavior. Whether short-term traders or long-term investors, understanding the deep logic of this correlation and adjusting strategies in combination with market dynamics will be key to seizing opportunities.
