Citi Lowers Bitcoin and Ether Price Targets Amid ETF Demand Decline

Investment bank Citi has reduced its 12-month price forecasts for bitcoin and ether, lowering bitcoin's target from $112,000 to $82,000 and ether's target from $3,175 to $2,240. The adjustments result from the bank's new stance on ETF inflows, predicting no new inflows for the next year and abandoning earlier expectations of increased demand fueled by regulatory progress.

According to analyst Alex Saunders, the falling projections stem from multiple factors, including stalled U.S. legislation regarding cryptocurrency and weak market sentiment. In a recent report, Saunders remarked, "The absence of a catalyst for increased investor interest means we reduce our base-case flow expectations to zero over the next 12m." This decline reflects how U.S. spot bitcoin ETF demand has sharply weakened, which has been a significant source of institutional investment since the funds' inception in 2024.

June saw record net outflows from these ETFs, totaling $4 billion, following a streak of redemptions. This marks a notable change from Citi's previous outlook, which anticipated that new legislation would encourage traditional investors to engage more actively in the market. With the legislative timeline appearing to slip, the market is currently bereft of significant catalysts.

The report further noted ongoing concerns that digital asset treasury companies may begin selling off bitcoin, compounding existing market pressures. Investors seem to favor AI-related investments over digital assets, while both bitcoin and ether trade below key technical indicators, including the 200-day moving average. The bank's predictions also incorporate various scenarios: in a bullish case, enhanced adoption could elevate bitcoin to $108,000 and ether to $2,932; conversely, a bear case could see bitcoin fall to $53,000 and ether to $1,094 due to recessionary conditions and poor ETF performance.

While Citi shows a more positive view regarding U.S. stocks, which may provide some correlation support for crypto, these positives are still insufficient against the backdrop of declining ETF flows. The bank emphasizes that any reversal in ETF demand or unexpected legislative developments could alter its outlook significantly.