This follows from the fact that $\pi_{1}(\mathbb{R}^3) = 0$. In fact, any two knots are also isotopic to the un-knot by shrinking the knotted parts of the knots to a point (an embedding for all $t$). The correct idea is an ambient isotopy, since when you shrink a portion of Euclidean space to a point you do not have an embedding of Euclidean space into itself.