As Volatility Rebounds, Citi Finds Crypto’s Correlation With Equities Deepening

Citi: Crypto’s Link to Traditional Markets Strengthens as Volatility Rises
October 28, 2025

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

Citi analysts Alex Saunders and Nathaniel Rupert attributed the shift to renewed macroeconomic pressure, pointing to the market turbulence earlier this month—dubbed crypto’s “Black Friday”—when escalating U.S.–China trade tensions sparked broad sell-offs across risk assets.

“Equities remain the dominant macro driver for crypto price action,” the analysts wrote. “While gold correlations have slipped slightly, they are still above long-term averages.”

The report added that regulatory progress could eventually provide crypto markets with unique catalysts that reduce dependence on broader financial trends. However, Citi noted that such a decoupling has not yet occurred.

Volatility is also making a comeback. One-month implied volatility for bitcoin (BTC $115,571) and ether (ETH $4,146) has risen above three-month averages, signaling increased uncertainty.

While bitcoin’s volatility remains below its one-year average, it continues to respond sharply to equity and gold movements. Ether, meanwhile, maintains higher short-term volatility, a pattern that emerged in late 2023 and has persisted despite stabilization from ETF-driven demand.

Citi concluded that, for now, crypto remains tightly intertwined with global market sentiment, with traditional risk dynamics still setting the tone for digital assets amid renewed volatility.