US-based investment bank Citigroup (Citi) has significantly lowered its 12-month price forecast for Bitcoin and Ethereum, citing continued outflows from spot crypto exchange-traded funds (ETFs) and a deteriorating market outlook. The bank noted that a decline in investor risk appetite and uncertainty surrounding U.S. cryptocurrency regulations are increasing pressure on the market.
According to Reuters, Citi lowered its 12-month price target for Bitcoin from $112,000 to $82,000. Similarly, we lowered our Ethereum forecast from $3,175 to $2,240. The bank has therefore adopted a more cautious outlook for both major crypto assets compared to its previous forecast.
According to Citi’s analysis, a recent decline in investor appetite for risk assets, continued net capital outflows from spot ETFs, and slower-than-expected progress on U.S. regulatory changes for the crypto sector are the main factors negatively impacting market expectations.
The bank also significantly revised its Spot Bitcoin ETF net inflow forecast for the next 12 months. Spot Bitcoin ETFs have recorded net outflows of approximately $3.3 billion since the beginning of the year, instead of the previously expected $10 billion in net inflows.
In addition to the base case, Citi also considered a more negative market outlook. The bank’s pessimistic scenario predicted a target price of $53,000 for Bitcoin and $1,094 for Ethereum.
Analysts believe that while global macroeconomic uncertainty, interest rate policy, and institutional demand will continue to be decisive factors in determining the direction of the crypto market, ETF flows will continue to be one of the most important indicators of investor confidence.
*This is not investment advice.
