U.S. stocks open higher across the board, why do crypto-related stocks fall sharply against the market?

The Nasdaq Index once plummeted more than 2.6% after the opening, then the decline narrowed, and it ultimately closed down 0.72%. The sharp fluctuations in the cryptocurrency market are even more astonishing, with Bitcoin dropping over 5% intraday, briefly falling to the $81,000 level, and over 220,000 traders being liquidated across the network within the past 24 hours.

01 Market Divergence

On January 29, when the US stock market opened, it presented a confusing divergence. The Dow Jones Industrial Average rose 0.14%, the S&P 500 increased 0.18%, while only the Nasdaq Composite slightly declined by 0.13%.

Within the tech sector, divergence was even more pronounced. Meta Platforms surged about 10% due to Q4 earnings, Q1 guidance, and full-year capital expenditure exceeding expectations. Meanwhile, Microsoft’s stock plunged over 8%, mainly because its cloud business growth slowed to 39%, and record-high capital expenditures raised market concerns.

The focus of the financial markets quickly shifted to cryptocurrency concept stocks, all of which declined across the board.

02 Performance of Concept Stocks

Cryptocurrency concept stocks collectively faced selling pressure, becoming the biggest casualties of the day. According to market data, MicroStrategy fell 3.89%, Coinbase dropped 3.97%.

Even MicroStrategy, known as the “Bitcoin leverage ETF,” and the publicly traded company holding the largest amount of Bitcoin globally, could not escape this wave of selling.

Other crypto-related companies also performed weakly: CRCL down 4.02%, SBET down 1.30%, BMNR down 3.98%. This widespread decline indicates that market concerns about the crypto industry are not limited to individual companies but reflect systemic pressure across the entire sector.

In stark contrast, tech star Meta Platforms surged about 10% on the same day.

03 Cryptocurrency Crash

The massive shock in the crypto market directly caused a sharp decline in concept stocks. At Beijing time 1/30 early morning, Bitcoin plummeted over 5%, briefly falling to the $81,000 mark. Major cryptocurrencies also declined: Ethereum down over 6%, SOL, Dogecoin also dropped more than 6%.

Market panic quickly spread. According to CoinGlass data, in the past 24 hours, a total of 227,939 traders were liquidated worldwide, with total liquidation amounting to $1.014 billion.

Based on Gate’s market data, as of January 30, Bitcoin traded around $82,500, with a 24-hour decline of approximately 6.4%. This significant drop in the underlying asset naturally dragged down the performance of related concept stocks.

04 Multiple Factors Converge

Geopolitical uncertainties further intensified. Market rumors suggest that U.S. President Trump is “considering launching a new major strike on Iran.” Iran, on the other hand, stated that “it will not initiate war proactively, but if war is provoked, it will defend itself with a firm stance.”

Fund flow data supports this view. Bloomberg data shows that over the past week, investors withdrew more than $1.3 billion from Bitcoin-related funds, continuing the trend of crypto ETF divestments.

Analysts from Citigroup and Tagus Capital pointed out that Bitcoin’s inflation hedge function is mostly incidental, influenced more by liquidity, risk appetite, and flows into tech stocks rather than a persistent link to dollar weakness or geopolitical pressure.

This round of market volatility reveals a trend: funds are shifting from high-risk crypto assets to more defensive asset classes.

05 Capital Rotation

While US stocks opened broadly higher, cryptocurrency concept stocks fell sharply, revealing a large-scale capital rotation in global financial markets.

Institutional investors are reassessing asset allocations. Some crypto companies announced plans to allocate 10% to 15% of their portfolios into physical gold. This adjustment directly reflects changing market sentiment.

A long-standing investment logic is being tested. Duke University professor Cam Harvey previously stated, “Bitcoin is unlikely to replace gold as investors’ preferred safe-haven asset.”

Historical correlation data also confirms this shift. According to Trefis research, Bitcoin’s correlation with traditional asset classes over the past 10 years, 5 years, and 1 year has been 26%, 38%, and 40%, respectively. This relatively low correlation was once seen as an advantage for diversification, but now it is a reason for capital outflows.

Future Outlook

Gold and silver, after reaching record highs, sharply declined, with intraday drops exceeding 5% and 8%, respectively.

The world’s largest gold ETF — SPDR Gold Trust — saw its holdings rise to near four-year highs, indicating that traditional safe-haven assets are regaining investor favor.

As market uncertainty engulfs the globe, capital flows from high-risk crypto assets and tech stocks back into traditional assets like gold and silver, intensifying market volatility.