Citigroup cut its 12-month forecasts for bitcoin and ether, citing weakening investor interest, negative ETF flows, and a lack of progress on U.S. digital asset legislation as factors that have damaged the outlook for the two largest cryptocurrencies.
The brokerage reduced its target for bitcoin to $82,000 from $112,000 and lowered its ether forecast to $2,240 from $3,175.
The forecast comes as Bitcoin dropped below $60,000 on Tuesday, marking its worst monthly performance since June 2022.
The world’s largest cryptocurrency has experienced a poor first half of the year, dropping 33% year to date compared to the S&P 500’s (^GSPC) gain of over 9%. It ended June down roughly 20%.
Citi stated that its revision was prompted by its decision to lower its 12-month net ETF inflow assumption from $10 billion to zero. Citi’s pessimistic scenario, which considers recessionary macro conditions and ongoing ETF withdrawals, projects Bitcoin at $53,000 and Ether at $1,094 within the next year.
“ETF flows, an important driver of prices, have turned negative recently,” it said, adding that bitcoin ETF flows were down about $3.3 billion so far this year. The brokerage expects broader investor adoption to remain on hold until a new catalyst emerges.
It also stated that slow progress on U.S. crypto legislation and worries about potential bitcoin selling by digital asset treasury companies have impacted investor sentiment, with the weakness coinciding with a shift into AI-related assets.
By CEO NA Editorial Staff
