US-based investment bank Citigroup (Citi) has significantly revised its 12-month price forecasts for Bitcoin and Ethereum downwards, citing ongoing capital outflows from spot cryptocurrency exchange-traded funds (ETFs) and a deterioration in the market outlook. The bank noted that decreased investor risk appetite and uncertainties surrounding cryptocurrency regulations in the US are increasing pressure on the market.
According to Reuters, Citi has lowered its 12-month target price for Bitcoin from $112,000 to $82,000. Similarly, it reduced its forecast for Ethereum from $3,175 to $2,240. Thus, the bank has adopted a more cautious outlook for both major crypto assets compared to its previous predictions.
According to Citi’s analysis, the recent weakening of investor appetite for risky assets, the continued net capital outflows from spot ETFs, and the slower-than-expected progress of regulatory changes in the US concerning the cryptocurrency sector are among the main factors negatively impacting market expectations.
The bank also significantly revised its net fund inflow expectation for spot Bitcoin ETFs over the next 12 months. The previously projected net inflow of $10 billion was reduced to zero, while a net outflow of approximately $3.3 billion from spot Bitcoin ETFs has been recorded since the beginning of the year.
In addition to its base scenario, Citi also considered a more negative market outlook. In the bank’s pessimistic scenario, the target price for Bitcoin was projected at $53,000, and for Ethereum at $1,094.
Analysts believe that global macroeconomic uncertainties, interest rate policies, and institutional investor demand will continue to be decisive factors in determining the direction of cryptocurrency markets in the coming period, while ETF fund flows will remain one of the most important indicators of investor confidence.
*This is not investment advice.
