Citi Says Crypto Markets Moving Closer to Stocks as Volatility Returns
October 28, 2025
Bitcoin and ether are once again mirroring traditional markets, with their correlation to U.S. equities and gold strengthening in recent weeks, according to a new report from Citi (C). The bank said renewed volatility across global markets has drawn crypto and risk assets back into alignment after a period of relative independence.
Citi analysts Alex Saunders and Nathaniel Rupert highlighted early October’s “Black Friday” event—when escalating U.S.–China trade tensions triggered simultaneous sell-offs in both stocks and cryptocurrencies—as evidence of the tightening relationship.
“Equities remain the key macro driver behind crypto’s short-term moves,” the analysts wrote. “Although the correlation with gold has eased slightly, it remains higher than its long-term average.”
Citi noted that while regulatory progress may eventually give crypto its own distinct catalysts, such divergence has not yet emerged. Instead, global macro sentiment and liquidity conditions continue to dictate digital asset performance.
Volatility, too, has made a comeback. One-month implied volatility in bitcoin (BTC $115,571) and ether (ETH $4,146) now exceeds their three-month averages, pointing to a shift toward more uncertain trading conditions.
Bitcoin’s volatility remains below its 12-month mean but continues to track movements in equities and gold closely. Ether, by contrast, has displayed sharper short-term price swings, a trend that began in late 2023 and has persisted despite the stabilizing influence of ETF inflows earlier this year.
According to Citi, the recent market behavior reinforces a familiar theme: despite growing institutional adoption and maturing market structure, crypto remains deeply intertwined with traditional financial markets—particularly when volatility returns.
