The Relationship of Cryptocurrencies and the Stock Market

Abstract

In today's world, with the internet and finance closely integrated, the global-ization of cryptocurrency has deepened, prompting people to pay more atten-tion to the impact of cryptocurrency on the entire financial market. This pa-per provides a comprehensive review of relevant literature from five aspects: the development of cryptocurrency, price changes, the impact of cryptocur-rency on the stock market, the impact of cryptocurrency on the banking in-dustry, and the currency and commodity characteristics of cryptocurrency. The author also compares the price curves (in USD) of the S&P 500, ETH, and BTC from March 21, 2022, to March 21, 2023, and hopes to gain in-sights into the relationship between stocks and cryptocurrencies. Our re-search shows that the emergence of cryptocurrency has had a significant im-pact on the financial market, particularly in the banking industry. Although the emergence of cryptocurrency has added vitality to the financial market and increased investment options, the instability of cryptocurrency has also brought risks to investors. As the cryptocurrency market continues to ex-pand, policymakers and investors need to understand its potential impact on traditional financial instruments and the broader economy.