Citi Cuts Bitcoin and Ether 12-Month Price Targets
According to a Reuters report, Citi Group has sharply lowered its 12-month price forecasts for Bitcoin and Ether. Bitcoin's target was reduced from $112,000 to $82,000, a decrease of approximately 27%, while Ether's expected price was cut from $3,175 to $2,240, a drop of about 29%. The revision comes amid persistently weak ETF inflows and reflects the bank's cautious stance on the near-term prospects of digital assets in the United States.
Key Factors Behind the Downgrade
Citi cited weakened investor interest, a significant decline in exchange-traded fund (ETF) inflows, and the lack of progress in U.S. digital asset legislation as key factors damaging the outlook for both cryptocurrencies. The most impactful adjustment was the bank's decision to reduce its 12-month ETF net inflow assumption from $10 billion to zero. This implies that Citi expects net capital inflows into Bitcoin ETFs to completely dry up over the next year, effectively nullifying the previously anticipated ETF-driven boost to the market.
In addition, the slow pace of U.S. crypto legislation has dampened market confidence. Despite repeated industry calls for a clear regulatory framework, relevant bills have yet to pass. Citi also noted that growing concerns over potential selling by digital asset managers are exacerbating negative investor sentiment. This weakness coincides with a shift of capital toward artificial intelligence-related assets, putting additional pressure on the crypto market.
Market Implications and Institutional Outlook
The magnitude of Citi's target price adjustments is significant, with Bitcoin and Ether now projected at $82,000 and $2,240 respectively, well below current market consensus. If realized, these levels imply substantial downside from present prices. Citi's bearish view is not isolated; several other investment banks have recently lowered their digital asset forecasts. Combined with capital rotation to AI and potential macroeconomic tightening, crypto valuations face headwinds. Investors should closely monitor U.S. regulatory developments and ETF flow data for further direction.