U.S. bank Citigroup (C) says that the correlation between cryptocurrencies and stocks has tightened in recent weeks as market volatility grows more pronounced.
Analysts at Citigroup point to market stress as pushing crypto and stocks closer together and leading to the risk assets moving more in tandem with one another.
Specifically, Citigroup points to the market swoon earlier in October when U.S.-China trade tensions triggered simultaneous selloffs in both stocks and crypto as evidence of the link.
New regulations could eventually weaken the connection between stocks and cryptocurrencies, argues Citigroup, though that hasn’t happened yet.
At the same time, cryptocurrencies such as Bitcoin (BTC), often referred to as “digital gold,” are showing less of a correlation with the price of gold bullion.
The tightening correlation with stocks comes as market volatility intensifies, leading to monthly declines for Bitcoin and other digital assets such as Ethereum (ETH).
Citigroup says that Bitcoin, in particular, is sensitive to swings in equities and the stock market.
While U.S. markets are at all-time highs, most of those gains are concentrated in a handful of mega-cap technology stocks such as Nvidia (NVDA) and Meta Platforms (META).
The majority of stocks listed on the S&P 500 are trailing the benchmark index’s 17% return this year.
Citigroup’s stock has risen 44% in 2025 to currently trade at $100.99 U.S. per share.
