Citigroup points to Bitcoin's dependence on stock market dynamics.
Date: 2025-10-15 Author: Oliver Abernathy Categories: CRYPTO PAYMENTS
Citigroup analysts stated that the massive liquidations in the crypto market overnight between October 10 and 11 were a clear example of how Bitcoin reacts to stock market fluctuations. In a report published by CoinDesk, the analysts emphasized that the decline in futures, caused by geopolitical tensions between the US and China, quickly spread to the cryptocurrency sector, demonstrating its vulnerability to external economic factors.
According to Citigroup, the panic was triggered by US President Donald Trump's decision to impose new tariffs on China. This move led to a sharp decline in global stock indices, resulting in more than $19 billion in futures positions being liquidated, and a 9% decline in total market capitalization.
A wave of liquidations caused instability on the Binance exchange, where several stablecoins, including USDe, BNSOL, and WBETH, temporarily lost their peg to the dollar. The platform's co-founder, Yi He, assured that the company is ready to take responsibility for the incident and mitigate its consequences.
By the time the report was published, Bitcoin prices had partially recovered and reached around $111,746. However, despite the incident, Citigroup maintained its forecasts: the bank expects Bitcoin to reach $133,000 by the end of 2025 and could reach $181,000 within 12 months. For Ethereum, the forecast remains at $4,500 by the end of the year and $5,400 within the next.
Citigroup noted that stable inflows into Bitcoin ETFs continue to support the market even after the large-scale liquidations. Analysts attributed this to the participation of "new, less leveraged investors" who remain confident in the asset's long-term prospects.
"Continuous inflows into ETFs strengthen the baseline upside scenario, although the risk of a correction remains due to equity market volatility," the bank's report stated.
Following the events, Crypto.com CEO Chris Marczalek called on regulators to investigate the exchanges that saw the largest liquidations. He called for ensuring that the platforms comply with anti-money laundering requirements and do not restrict trading access at critical moments.
Meanwhile, Hyperliquid founder Jeff Yang stated that some centralized exchanges "underreport actual liquidation data by tens or even hundreds of times." He argued that despite the enormous volume of liquidations, only a small portion of the actual data is published, distorting the picture of market activity.
Thus, the events of early October confirmed that the cryptocurrency sector remains dependent on traditional financial mechanisms, and that Bitcoin's stability is largely determined by sentiment on stock markets.
