Citi has downgraded its 12-month forecasts for bitcoin and ether, citing ETF outflows and legislative stagnation as primary factors.
Citi has revised its price expectations for bitcoin and ether downward due to a lack of ETF inflows and waning legislative support.
Citi has updated its 12-month price forecasts for bitcoin and ether, lowering its targets significantly amid a decline in investor interest and halted expectations for ETF inflows. The bank now projects bitcoin to reach $82,000, down from $112,000, and ether to hit $2,240, down from $3,175.
This adjustment reflects a shift in sentiment as the bank anticipates no net inflows into ETFs over the next year, contrary to its previous expectations of rising demand driven by regulatory advancements in the U.S. market.
As of now, bitcoin is trading around $58,400, while ether is at approximately $1,570. Analyst Alex Saunders noted that the absence of a catalyst to engage investors has prompted the bank to adjust its flow expectations to zero for the upcoming year.
Interest in U.S. spot bitcoin ETFs has diminished significantly, with a record $4 billion in net outflows recorded in June, marking the largest monthly withdrawal since the funds were launched in 2024. This trend has left the market without the institutional investment that was previously buoyed by these ETFs.
Citi's earlier predictions had relied on the assumption that U.S. legislative progress would foster adoption among traditional investors and financial advisors, a belief that now appears delayed. Saunders pointed out that ETF inflows have been the main driver of cryptocurrency prices, and with investors becoming more risk-averse, recent demand has turned negative.
Concerns have also emerged that companies holding digital assets may start selling off their bitcoin holdings, which could further impact prices. Currently, both bitcoin and ether are trading below crucial technical thresholds, including their 200-day moving averages.
Citi's new forecasts incorporate a scenario where ETF flows stabilize. In a more optimistic scenario, the bank suggests that increased retail and institutional adoption could push bitcoin to $108,000 and ether to $2,932. Conversely, in a bearish scenario characterized by recessionary pressures and further ETF outflows, bitcoin could drop to $53,000 and ether to $1,094.
Despite the lowered price targets, Citi emphasizes that ETF flows remain a critical component of its valuation model, and any shift in investor sentiment or unexpected legislative developments could quickly alter this outlook.
