Citi: Crypto-Stock Correlation Set to Decline as Digital Assets Mature

The link between Bitcoin and the stock market is expected to weaken over time as the digital asset space evolves, according to a new report from Wall Street bank Citi (C).

While equities have historically influenced crypto markets, Citi analysts argue that the correlation will diminish as institutional adoption rises, blockchain technology advances, and the investor base diversifies.

However, the report notes that cryptocurrency markets remain speculative, meaning that correlations with traditional risk assets may still surge during periods of financial uncertainty.

“As regulatory clarity improves in the U.S., crypto is likely to exhibit more independent price movements,” lead analyst Alex Saunders wrote.

Citi also pointed out that Bitcoin’s volatility is projected to decline in the long run as more institutional players enter the market. Additionally, digital assets were the only asset class to increase their market cap relative to U.S. equities last year.

Another key trend to watch, according to the report, is Bitcoin’s growing correlation with gold, which could signal increasing recognition of BTC as a “store of value” asset.