Citigroup says the crypto market has moved beyond an acute deleveraging phase

Waves of converting stablecoins into fiat and withdrawals from крипто-ETF have subsided, and the stETH–ETH spread has narrowed. Citi analysts saw in this signs that the market panic had abated, as reported by CoinDesk.

Experts say that the easing of uncertainty about the extent of mutual risks among industry participants, after the restructuring of some players, played a positive role.

In May–June, “liquidity stress” led to some “intramarket distortions,” analysts noted.

One such instance was the divergence between Bitcoin prices in USD on Coinbase and in USDT on Binance. Normally, the first tends to exceed the second, reflecting institutional demand. Only recently has the discount again flipped to a premium.

The bank’s strategists emphasised that crypto markets remain too small to trigger material spillovers for traditional financial markets and the wider economy. They conceded that, one way or another, the momentum of digital assets influences investors’ sentiment.

In November 2021, Citi announced plans to запустить a digital assets division for institutions. Prior to that, a similar group создали в структуре within Citi Global Wealth Investments.

In June 2022, the institution выбрало Metaco as partner to launch a custodial platform.

Earlier, JPMorgan analysts described growing interest in Ethereum ahead of the transition to PoS as one of the reasons for the crypto market’s recovery.

Prior to that, bank strategists predicted that the worst for the digital assets market was behind.

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