Citigroup has lowered its 12-month forecasts for Bitcoin and Ethereum. The bank said it revised its outlook due to weaker investor interest, outflows from exchange-traded funds, and slow progress on digital asset legislation in the United States.
Updated Forecasts
Citigroup cut its Bitcoin price target from $112,000 to $82,000 and lowered its Ethereum forecast from $3,175 to $2,240.
The main reason for the revision was the bank’s updated assessment of capital flows into spot ETFs. Analysts had previously expected net inflows of around $10.0B over the next year, but the bank’s base-case scenario now assumes no net inflows.
The bank also noted that about $3.3B has already been withdrawn from Bitcoin ETFs since the beginning of the year.
Factors Weighing on the Market
According to Citigroup, broad investor interest is likely to remain subdued until new market catalysts emerge. The bank also said that slow progress on digital asset legislation in the United States and concerns that companies holding Bitcoin as part of their corporate reserves could begin selling those reserves are continuing to weigh on the market.
Citigroup also linked weaker interest in cryptocurrencies to a shift in capital toward AI-related assets.
In its bearish scenario, which assumes a worsening macroeconomic environment and continued ETF outflows, Citigroup expects Bitcoin to fall to $53,000 and Ethereum to $1,094 over the next 12 months.
At the time of publication, BTC is trading at around $58,600, while ETH is trading at approximately $1,571.