Research Article
Research on the Relationship between the Price of Bitcoin and the Stock Market Base on Linear Regression
@INPROCEEDINGS{10.4108/eai.9-12-2022.2327565, author={Sufeng Jiang}, title={Research on the Relationship between the Price of Bitcoin and the Stock Market Base on Linear Regression}, proceedings={Proceedings of the 4th Management Science Informatization and Economic Innovation Development Conference, MSIEID 2022, December 9-11, 2022, Chongqing, China}, publisher={EAI}, proceedings_a={MSIEID}, year={2023}, month={3}, keywords={bitcoin cryptocurrency stock market linear regression}, doi={10.4108/eai.9-12-2022.2327565} }- Sufeng Jiang
Year: 2023
Research on the Relationship between the Price of Bitcoin and the Stock Market Base on Linear Regression
MSIEID
EAI
DOI: 10.4108/eai.9-12-2022.2327565
Abstract
In recent years, people's investment interest has spread from the stock market to Bitcoin. There is a trend implying the correlation between Bitcoin and the stock market. This paper investigates the relationship between the price of Bitcoin and the stock market. The indexes data gathered from FRED and the Bitcoin price gathered from Kaggle. This research uses linear regression to analyze the correlation between three representative indexes which are S&P500, Nasdaq, and Dow Jones. These three indexes have an essential impact on the global stock market. This research only uses the indexes as an independent variable for univariate regression analysis since introducing too many variables will make linear regression too complicated. The results of the research show that in the basic linear regression model, Bitcoin and the stock market have many similarities and correlations. Although the correlation became unclear and bias after adding more variables into the linear regression, in the long run, the trend of stocks will affect the price of Bitcoin, and it is a positive linear relationship.
