Citi Cuts Crypto Price Targets as ETF Demand Plummets

Citi, a leading Wall Street bank, has reduced its price targets for Bitcoin and Ether due to decreased demand from exchange-traded funds (ETFs) and diminishing prospects of US crypto legislation. The bank's analyst Alex Saunders wrote that the absence of a catalyst for increased investor interest means they reduce their base-case flow expectations to zero over the next 12 months.

In a recent report, Citi cut its 12-month price target for Bitcoin to $82,000 from $112,000 and reduced its Ether target to $2,240 from $3,175. The bank's previous outlook assumed passage of US digital asset market structure legislation would spur adoption among financial advisors and traditional investors.

The downgrade marks a sharp reversal from Citi's earlier prediction that ETF flows would drive institutional buying in the crypto market. However, recent demand for ETFs has weakened sharply, with a record $4 billion in net outflows in June and year-to-date flows turning negative for the first time.