Why Citi Remains Bullish on Crypto Stocks Amid Market Volatility

The digital asset ecosystem, once characterized by speculative frenzy and regulatory ambiguity, is maturing into a more structured and institutionalized market. Against this backdrop, Citi has maintained a bullish stance on crypto stocks, even as market volatility persists in 2025. The bank's confidence stems from a combination of macroeconomic tailwinds, strategic investments, and a broader reimagining of how digital assets integrate into traditional finance.

A Maturing Ecosystem: From Volatility to Institutional Adoption

Citi's 2025 outlook underscores a pivotal shift in the crypto landscape. According to a report by Citi, the total market cap of cryptocurrencies surged by 94% in 2024, driven by the approval of spot ETFs for Bitcoin and Ethereum and a post-election rally following Donald Trump's victory, which signaled optimism about regulatory easing. While short-term volatility remains a concern-equity strategists predict elevated S&P 500 volatility in 2025-the report notes that crypto volatility is expected to trend downward over the long term. This is attributed to Bitcoin's growing integration into institutional portfolios, which introduces more balanced price dynamics as demand stabilizes.

Citi's own financial performance reinforces this narrative. The bank's Q2 2025 earnings revealed robust growth, with a strategic pivot toward stablecoins positioning it to dominate the $5 trillion cross-border payments market. By leveraging stablecoin infrastructure, Citi is addressing a critical pain point in global finance: the need for faster, cheaper, and more transparent transactions.

Strategic Partnerships: Bridging Traditional and Digital Finance

Citi's bullishness is not merely speculative-it is underpinned by concrete strategic initiatives. One of the most notable is its collaboration with Coinbase, announced in 2025, to enhance digital asset payment capabilities for institutional clients. This partnership focuses on fiat pay-ins/pay-outs and payments orchestration, effectively serving as a bridge between traditional banking and the crypto ecosystem. By integrating Coinbase's liquidity and Citi's global infrastructure, the bank is addressing institutional demand for seamless asset management in a hybrid financial environment.

Another key move is Citi's investment in BVNK, a stablecoin infrastructure provider. This partnership aims to expand 24/7 digital payments and facilitate cross-border transactions, aligning with Citi's broader goal of modernizing global payment systems. Stablecoins, which offer the speed of crypto with the stability of fiat, are becoming a cornerstone of Citi's strategy to capture market share in the digital asset space.

Product Innovation: Crypto Custody and Tokenization

Looking ahead, Citi is preparing to launch a crypto custody service in 2026, a move that signals its intent to compete directly with traditional custodians in the digital asset space. This service will allow clients to manage both traditional and digital assets through a single interface, addressing a critical gap in institutional investing. By offering secure, institutional-grade custody solutions, Citi is positioning itself to capitalize on the growing demand for crypto from pension funds, endowments, and other large investors.

Additionally, Citi has partnered with SDX, the digital asset arm of Switzerland's SIX Group, to tokenize and settle assets on SDX's blockchain-based Central Securities Depositary (CSD) platform. This collaboration, set to go live in Q3 2025, simplifies liquidity management for private market assets and leverages Citi's securities services expertise alongside SDX's regulated infrastructure. Tokenization is a key driver of the maturing digital asset ecosystem, enabling fractional ownership and improved market efficiency.

Navigating Volatility Through Long-Term Vision

While crypto investors have recently shifted to more cautious strategies, Citi's approach emphasizes long-term structural trends. The bank's internal platform, CIDAP, enables integration with blockchain technologies and tokenization capabilities, further solidifying its role as a bridge between legacy systems and emerging digital finance. By investing in infrastructure rather than speculative assets, Citi is hedging against short-term volatility while positioning itself to benefit from the ecosystem's evolution.

Conclusion: A New Era for Digital Assets

Citi's bullish stance on crypto stocks reflects a broader industry transition. As regulatory clarity emerges, institutional adoption accelerates, and technological infrastructure matures, digital assets are becoming an integral part of the global financial system. Through strategic partnerships, product innovation, and a focus on stablecoins and tokenization, Citi is not just adapting to this shift-it is actively shaping it. For investors, the bank's confidence in the digital asset ecosystem may serve as a signal that the market is moving beyond its speculative origins and into a phase of sustainable growth.