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

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

There has been a clear weakening of the correlation between the S&P 500 equity index and bitcoin (BTC) as crypto markets suffer after the FTX and Alameda collapse, Citi (C) said in a research report last week.

The S&P 500 gained almost 6% last week, whereas bitcoin fell around 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 to traditional markets, the report added.

The bank notes that decentralized exchanges’ (DEXs) volumes have surged as much as 30% month-to-date, increasing market share over centralized exchanges (CEXs) such as FTX, “amidst centralized custody fears.”

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