There are two opposite camps out there arguing with each other – those who say Bitcoin decoupled from the stock markets and has a market destiny of its own, and those who support the idea that Bitcoin still reacts to the same stimulus the stock markets react to. Each side comes with charts and whatnot in support of their beliefs that surely always ends in a perpetual state of contradiction. What they need is a circuit breaker event that regresses those discrepancies to the mean and make them realize there are no differences between the markets mentioned above.
As the title of this article suggests, 'Crypto Markets Are No Different Than Regular Stock Markets', the mean is obviously the central line between those opposing theories. That specific area that incorporates the shared idiosyncrasy of both markets many can't or refuse to see – the basic trait that lays at the foundation of a human being - human psychology.
We can't disregard the differences of the crypto markets and those of the stock markets as they are many and of great importance. The volatility of the crypto is well known and the unpredictability of the assets only makes it much worse. In addition, sudden crashes and panic-selling are more prevalent on these markets than on the regular ones. But the markets both react to the same macro events happening on in the world.
Humans are the players making the stock markets and the crypto markets rise and fall. They are the wheels behind the machine and every person is a frail being subject to emotions. He is prone to being manipulated by others. He always mimics the others and acts how the crowd acts. Thus, markets turn to green and then red. As the crowd panics, it feels the impulse to buy or to sell.
As a conclusion, cryptocurrencies and stocks are coupled and have similar momentums and downfalls even if prices and volumes differ. The underlying assets ($BTC, $ETH, $TSLA, $PLTR) are just that – assets and are manageable by different mental states.
Everything that relies on human beings is highly unpredictable, volatile and easy to be manipulated.