Citi: Correlation Between Equity Markets, Bitcoin Weakens Following FTX Collapse

Decentralized exchanges have gained market share as confidence in their centralized equivalents have declined, the report said.

AccessTimeIconNov 14, 2022 at 12:17 p.m. UTC
Updated Nov 14, 2022 at 4:58 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The correlation between the S&P 500 and bitcoin (BTC) has weakened as crypto markets suffer after the FTX and Alameda Research collapse, Citigroup (C) said in a research report last week.

The S&P 500 gained almost 6% last week, whereas bitcoin fell by about 20%.

Traditional financial markets have been largely unaffected by the collapse in an indication that “contagion effects are relatively siloed within crypto,” the report said.

Given the magnitude of the fallout, it's not yet certain if contagion into other asset classes has been avoided, but the digital asset sector remains relatively small compared with traditional markets, the report added.

The bank notes that decentralized exchanges’ volumes have surged as much as 30% so far this month, increasing market share over centralized exchanges such as FTX, “amidst centralized custody fears.”

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Author placeholder image

Will Canny is CoinDesk's finance reporter.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.