Citi bank has lowered its 12-month price targets for Bitcoin and Ether, pointing to weaker demand for spot ETFs and less optimism about new US crypto laws boosting institutional investment soon. The bank now expects Bitcoin to reach $82,000, down from $112,000, and Ether to hit $2,240, down from $3,175. Citi no longer expects net inflows into crypto ETFs this year, saying there is no strong reason for new investor interest right now. This change shows that institutional investors are becoming more cautious, even though the overall economic outlook remains positive.
Citi analyst Alex Saunders said in a recent report that the bank no longer believes US regulatory progress will lead financial advisers and institutional investors to put more money into crypto. Now, Citi expects ETF flows to stay flat over the next year.
Spot Bitcoin ETFs drove much of the institutional demand when they launched in early 2024, but that momentum has faded. In June, there were almost $4 billion in net outflows, the largest monthly withdrawal since these ETFs began. Ongoing redemptions have pushed ETF flows for the year into negative territory.
Citi says ETF demand is still the main factor affecting crypto prices. As investors grow more cautious, the bank thinks Bitcoin and Ether may have trouble rising again unless more institutional buyers come back.
The report also pointed out worries about digital asset treasury companies. Investors are concerned that some of these firms might start selling more Bitcoin if the market gets worse. While recent sales have been small, they have still hurt market sentiment.
Technical signals also suggest caution. Bitcoin and Ether are both trading below their 200-day moving averages, a key level for many traders. Meanwhile, some investors have moved money from cryptocurrencies to AI-related investments, which have performed better this year.
Even with lower forecasts, Citi still sees a chance for recovery. In a best-case scenario, more retail investors, renewed institutional demand, and better regulation could push Bitcoin to $108,000 and Ether to $2,932 in the next year. In a worst-case scenario, if the economy worsens and ETF outflows continue, Bitcoin could drop to $53,000 and Ether to $1,094.
Citi also said that while stronger US stock markets might help cryptocurrencies a little, good economic news alone probably won’t make up for weak investment flows. The bank thinks that a real boost in ETF demand or surprise regulatory changes could quickly improve things, but for now, it expects the crypto market to remain cautious.
Citi Slashes Bitcoin and Ether Targets as ETF Flows Turn Negative
According to Reuters, Citi cut its 12-month forecasts for bitcoin and ether, lowering its bitcoin target from $112,000 to $82,000 and its ether target from $3,175 to $2,240. Citi also reduced its expected ETF net… pic.twitter.com/W4nZo90zl5
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