Citigroup has once again trimmed its 12-month price targets for bitcoin and ether, citing a sharp slowdown in exchange-traded fund (ETF) inflows and a lack of momentum in US crypto legislation. The move comes as bitcoin slid below $60,000, extending a period of weakness for the largest cryptocurrency.
In a research note dated Tuesday, Citi cut its bitcoin target to $82,000 from $112,000 and lowered its ether target to $2,240 from $3,175. The bank highlighted that ETF flows have been a key driver of crypto prices, and it now assumes zero net inflows over the next year—down from a previous assumption of $10 billion in inflows.
ETF Outflows and Legislative Gridlock
Citi pointed to a significant reversal in ETF flows as a major factor behind its revised outlook. Bitcoin ETF flows are down about $3.3 billion so far this year, according to the bank, which aligns with softer prices. Bitcoin was last trading at $58,864, below the psychologically important $60,000 level.
The bank also flagged slow progress on US crypto legislation as a headwind. Without clear regulatory frameworks, institutional investors may remain cautious, limiting the potential for sustained price gains. This legislative uncertainty adds to the pressure on crypto markets, which have already been hit by broader macroeconomic factors such as rising Treasury yields.
For context, bitcoin ETFs—which allow investors to gain exposure to the cryptocurrency without directly holding it—have seen record outflows recently. As reported in Bitcoin ETFs See Record $4.1 Billion Outflows as Institutional Demand Fades, institutional demand has cooled significantly, contributing to the price decline.
What This Means for Investors
For everyday investors, Citi's revised targets underscore the volatility and uncertainty that still define the crypto market. While bitcoin and ether have rallied strongly in the past, the current environment suggests that prices may struggle to regain their highs without fresh catalysts.
The bank's assumption of zero net ETF inflows over the next year is a stark shift from earlier optimism. If ETF flows remain negative, it could keep a lid on prices. However, some analysts note that crypto markets have historically rebounded after periods of weak sentiment, and legislative progress—though slow—could eventually provide a boost.
Investors should also be aware that price targets from banks like Citi are not guarantees. They reflect one institution's view based on current data and assumptions, which can change quickly. The broader market backdrop, including interest rates and economic data, will continue to influence crypto prices.
For those holding crypto or considering an investment, the key takeaway is to focus on long-term trends rather than short-term price moves. Diversification and risk management remain important, especially in an asset class known for its sharp swings.
Broader Market Context
The crypto sell-off is not happening in isolation. Rising Treasury yields have pressured risk assets across the board, including stocks and cryptocurrencies. As Bitcoin Dips Below $59K as Rising Treasury Yields Pressure Crypto noted, higher yields make safer assets like bonds more attractive, drawing money away from speculative investments.
Meanwhile, some institutional investors are shifting focus away from crypto. For example, Empery Digital Invests $65M in Midwest AI Data Center, Moves Away from Bitcoin NAV Focus highlights a pivot toward artificial intelligence infrastructure, which may further reduce demand for crypto exposure.
Despite the current gloom, bitcoin has shown resilience in the past, recovering from steep declines. Whether it can do so again will depend on a combination of ETF flows, regulatory clarity, and broader market conditions. For now, Citi's revised targets serve as a reminder that the crypto winter may not be over yet.
