Citi: Bitcoin-Stock Market Correlation Expected to Decline as Crypto Matures
The relationship between bitcoin (BTC) and traditional stock markets is likely to weaken over time as digital asset adoption expands, according to a new research report from Wall Street bank Citi (C).
While equities have historically been a key macro driver for crypto markets, Citi analysts predict that the correlation between the two asset classes will decline as the cryptocurrency sector matures, attracts a broader investor base, and benefits from technological advancements.
However, the report notes that crypto’s speculative nature still makes it vulnerable to heightened correlations with risk assets, particularly during periods of market turbulence.
“A clearer regulatory framework in the U.S. will also contribute to more independent price movements in the crypto space,” said the report, led by analyst Alex Saunders.
Citi also forecasts that Bitcoin’s long-term volatility will gradually decrease as institutional adoption accelerates. Notably, crypto was the only asset class to see its market capitalization rise as a percentage of U.S. equities in the past year.
Additionally, Citi highlighted Bitcoin’s growing correlation with gold, suggesting it could be an early indicator of BTC’s emergence as a “store of value” asset.
