Crypto’s Link to Stock Markets Strengthens as Volatility Rises, Citi Reports

Citi Says Crypto’s Correlation With Stocks Deepens as Market Volatility Rebounds
October 28, 2025

Cryptocurrencies are once again moving in lockstep with traditional financial markets, according to a new report from Citi (C). The bank noted that both bitcoin and ether have shown stronger correlations with U.S. equities and gold in recent weeks, as market volatility returns.

Analysts Alex Saunders and Nathaniel Rupert said the connection between digital assets and traditional markets has intensified amid renewed macroeconomic uncertainty. They pointed to early-October’s “Black Friday” sell-off—sparked by U.S.–China trade tensions—as a clear example of how risk sentiment now drives both asset classes simultaneously.

“Equities remain the main macro force behind crypto’s short-term movements,” the analysts wrote. “Gold correlations have eased slightly but remain elevated compared to historical norms.”

Citi added that while regulatory progress could eventually provide independent drivers for crypto markets, that separation has yet to materialize. For now, crypto continues to react to the same macro shocks influencing global equities and commodities.

Volatility has also climbed across the board. One-month implied volatility in bitcoin (BTC $115,571) and ether (ETH $4,146) has risen above three-month averages, reflecting short-term uncertainty in the market.

Bitcoin’s price swings remain below its one-year volatility average but are still highly sensitive to shifts in equity and gold markets. Ether, however, continues to exhibit greater short-term volatility, a pattern that began in late 2023 and has persisted even as optimism around ETF inflows helped stabilize the broader crypto landscape.

Citi concluded that despite the industry’s growing maturity, crypto’s performance remains tied to global risk sentiment, suggesting that broader market volatility will continue to dictate near-term direction for digital assets.

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