Chinese Tech Stocks Plunge Sharply, Bitcoin Moves Counterably—but Risks Remain Chinese tech stocks erased approximately $480 billion in market capitalization, while Bitcoin rose 26.6% over the same period. However, a rising daily correlation with the Nasdaq 100 indicates that margin liquidation risks have not subsided. Chinese tech stocks tumbled sharply, wiping out around $480 billion in market value, while Bitcoin climbed 26.6% during the same timeframe. Yet, this divergence is not enough to confirm that Bitcoin has fully decoupled from equity market volatility. According to data cited by CoinSlate on October 29, the STAR50 Index—which tracks 50 representative stocks on the STAR Market of the Shanghai Stock Exchange—fell 39.8% between July 9 and October 26. In contrast, Bitcoin rose 26.6% over the same period. However, Reuters reported that the daily return correlation between Bitcoin and the Nasdaq 100, calculated over 30 trading days of the U.S. equity market, rose to approximately 0.63 by October 26, up from 0.36 on July 9. This suggests that although the overall trend of the two assets diverged during the period, their daily price movements have become increasingly synchronized. One key factor closely watched by markets is financial leverage and the risk of cross-market fire sales. As margin pressures mount or investors are forced to sell assets to cover losses elsewhere, Bitcoin’s current rally could be vulnerable to external shocks. The critical question is whether the sell-off in Chinese tech stocks will trigger a cash crunch and cascading liquidations across other markets. If stock prices continue to decline and margin requirements rise, investors may be compelled to sell profitable assets—including Bitcoin—to boost liquidity. Meanwhile, inflows into spot Bitcoin ETFs have remained unstable. On October 22, these funds experienced net outflows of $636 million, but by October 26, they recorded net inflows of $110 million. These developments show that Bitcoin has demonstrated relative strength in the short term but cannot yet be considered fully insulated from risks originating in other asset markets. Amid heightened volatility, investors continue to closely monitor leverage pressures across markets and the potential for chain-reaction liquidations to spread into digital asset markets. By Yoonseo Lee