Citi: Bitcoin’s Correlation to Stocks Will Weaken as Crypto Market Matures
The link between Bitcoin (BTC) and the broader stock market is expected to weaken as the adoption of digital assets expands, according to a research report from Wall Street bank Citi (C) released on Monday.
While equities have historically been the dominant macro driver for cryptocurrency markets, Citi analysts believe this relationship will erode over time. “As the crypto sector matures, the investor base diversifies, and technological advancements continue, the equity-crypto correlation is likely to decline,” the report noted.
However, due to the speculative nature of digital assets, correlations with risk assets may still surge during periods of market turbulence, the bank cautioned.
Citi’s analysts, led by Alex Saunders, also highlighted that clearer regulatory guidelines in the U.S. could lead to more distinct price movements in crypto, reducing its dependency on traditional financial markets.
Additionally, the bank expects Bitcoin’s volatility to diminish over the long term as institutional adoption increases. It also pointed out that crypto was the only asset class that expanded its market cap relative to U.S. equities last year.
Another emerging trend to watch, according to Citi, is Bitcoin’s growing correlation with gold—a potential signal that BTC is increasingly being viewed as a “store of value.”
