The influence of the biggest cryptocurrency cannot be underestimated. The Bitcoin market extends way beyond the blockchain and DeFi world, connecting it also with traditional assets.
Bitcoin and other cryptocurrencies
The introduction of Bitcoin (BTCUSD) in 2009 has changed the financial landscape forever. The combination of value, cryptography, limited supply, and multiple other aspects created a one-of-a-kind financial asset. It has led to the beginning of multiple other cryptocurrencies, and each of them presents unique benefits not only for traders but also for owners themselves.
The second biggest cryptocurrency is Ethereum. It has revolutionized the crypto world by implementing the DeFi. Even though this crypto hasn’t developed as strongly as Bitcoin, it still generates a decent amount of interest from traders, especially through pairs such as ETHUSD and ETHBTC, which present the relationship between Bitcoin and Ethereum.
Traders also point out other altcoins, which are developing in the background behind the two largest cryptocurrencies. The two notable examples are Solana (SOLUSD) and Cardano (ADAUSD). The Bitcoin market and its influence pushes other cryptocurrencies to further development.
Bitcoin market related to forex
Everyone eager to invest must remember that the Bitcoin market has a strong impact on other assets, even forex currency pairs, metals, and commodities.
As the name speaks for itself, BTCUSD strongly relates to the performance of the American Dollar. When the U.S. national currency strengthens, Bitcoin will be relatively more expensive to non-USD owners. Currency pairs such as USDMXN and USDKRW can also experience similar inverse moments.
Even though they come from completely different times, Bitcoin and gold have many common points. Investors use them both as hedges against inflation due to a limited supply. Moreover, BTCUSD and XAUUSD may have an inverse relationship to the U.S. Dollar. When it comes to commodities such as OIL, traders also have to remember the market sentiment. Even though Bitcoin presents some similarities to XAUUSD, it is still treated as a more volatile asset. During times like days after the U.S. Elections with daily BTC ATH, stable financial instruments like gold may decline, while OIL usually goes up during times of economic optimism. Nevertheless, commodities that are heavily tied to geopolitical situations may behave differently than cryptocurrencies.
Companies related to Bitcoin – stocks and indices
Even though there are no Bitcoin stocks per se, some of them strongly correlate with the biggest crypto’s price movements. Usually, there are two reasons: market excitement with hi-tech solutions or large BTC possessions by the company.
Recently, Tesla has had a time of its own, mostly due to the U.S. election results. However, its major value increase comes together with skyrocketing Bitcoin. TSLA stock price depends on market sentiment more than any other company. Traders can sometimes notice a correlation between companies from the US100 index and Bitcoin. There are multiple NASDAQ assets catching attention in the market, such as UPST stock price.
Some companies, together with their daily activities, possess substantial amounts of Bitcoin. Microstrategy is the most recognizable example – the business intelligence firm strongly relates to BTC. That’s why increases in Bitcoin’s value usually mean the rise of MSTR stock price.
There is also quite an obvious connection between BTC and Coinbase – a crypto exchange platform.
What is Bitcoin market? Summary
The Bitcoin market is a global decentralized marketplace where Bitcoin is bought and heavily influences other financial assets. It impacts not only other cryptocurrencies like Ethereum, Solana, and Cardano but extends beyond blockchain into traditional finance.
As a hedge against inflation, Bitcoin often shows relationships with assets like gold, while companies such as Tesla and MicroStrategy exhibit correlations to BTC due to market excitement and significant holdings.
