Citigroup, one of Wall Street’s most closely watched institutional research desks, cut its 12-month price targets for both Bitcoin and Ether on Tuesday, citing deteriorating ETF flows, stalled U.S. digital asset legislation, and a broad rotation out of crypto into AI-related assets — a downgrade that raises a pointed question about when, or whether, the next crypto catalyst will arrive.
The brokerage’s note, dated Tuesday, lowered its Bitcoin forecast from $112,000 to $82,000 and trimmed its Ether target from $3,175 to $2,240, according to the firm’s research. Bitcoin was trading at $58,864.27 at the time of publication — its weakest level since September 2024 and roughly half the all-time high of $126,223.18 it reached in October of last year. Ether was last at $1,585.63, its lowest since April 2025.
The central mechanism behind the revision was a model adjustment, not a macro call. Citi said it reduced its 12-month net ETF inflow assumption to zero, down from a previous expectation of $10 billion, the firm said. “ETF flows, an important driver of prices, have turned negative recently,” the bank noted, adding that Bitcoin ETF flows were already down approximately $3.3 billion for the year to date.
Who’s Affected?
The downgrade lands hardest on institutional investors who entered the market through spot Bitcoin and Ether ETFs — the same vehicles that Citi now considers a drag rather than a tailwind. Both cryptocurrencies are trading below their long-term moving-day averages, a technical threshold that typically reflects and reinforces bearish sentiment, according to the bank. With ETF flows in negative territory, the marginal institutional buyer that drove the 2024 rally is no longer a reliable source of demand. Analysts had previously argued that BlackRock’s Bitcoin ETF represented the market’s best chance at a 2026 recovery — a thesis that Citi’s zero-inflow assumption now directly challenges.
Corporate treasury holders also face pressure. Citi flagged concerns over potential Bitcoin selling by digital asset treasury companies as a sentiment headwind, without naming specific firms. That risk sits alongside a broader investor rotation: the bank noted that weakness in crypto has coincided with capital moving into AI-related assets, suggesting the two asset classes are now competing for the same speculative allocation pool. Goldman Sachs data showing one in five U.S. companies already deploying AI underscores why that rotation has narrative momentum behind it.
What Comes Next?
Citi said it expects broader investor adoption to remain on hold until a new catalyst emerges, but did not specify what form that catalyst might take. The firm did, however, model a bear case: if recessionary macroeconomic conditions materialize and ETF outflows persist, Citi values Bitcoin at $53,000 and Ether at $1,094 over the next 12 months. That scenario implies a further 10% decline from current Bitcoin levels and a 31% decline for Ether.
The legislative dimension is equally unresolved. Citi cited slow progress on U.S. crypto legislation as a contributing factor to weakened sentiment. Washington’s broader crypto regulation push has been reshaping capital markets expectations, but without a concrete timeline for framework passage, institutional allocators have little policy certainty to anchor new positions. The SEC is not expected to propose its first major crypto rule until as early as July 2026, leaving a significant gap in the regulatory calendar.
Taken together, Citi’s two core drivers — zero expected ETF inflows and legislative paralysis — are not independent variables. ETF demand from large asset managers is partly a function of regulatory clarity: without a settled framework governing custody, disclosure, and asset classification, compliance teams at major institutions face real obstacles to increasing crypto allocations. The implication is that stalled legislation and stalled ETF flows are mutually reinforcing, meaning a single catalyst — such as a landmark bill reaching the Senate floor — could unwind both headwinds simultaneously. That also means the downside risks are stickier than either factor alone would suggest.
How Citigroup’s Targets Compare to Other Institutional Forecasts
Citi’s revised targets sit notably below the most bullish institutional projections circulating in early 2025, though they remain above current spot prices — a nuance worth examining in context.
| Institution / Scenario | Bitcoin 12-Month Target | Ether 12-Month Target | Key Driver Cited |
|---|---|---|---|
| Citigroup (Base Case) | $82,000 | $2,240 | Zero net ETF inflows; stalled legislation |
| Citigroup (Bear Case) | $53,000 | $1,094 | Recession + continued ETF outflows |
| Current Spot Price (at time of note) | $58,864 | $1,586 | — |
| Previous Citi Target (pre-revision) | $112,000 | $3,175 | $10B net ETF inflow assumption |
Source: Citigroup research note, Tuesday. Spot prices as reported at time of note. Prior targets are Citi’s own previous estimates.
The gap between Citi’s base case and current spot prices — roughly $23,000 for Bitcoin — implies the bank still sees upside over a 12-month horizon, but the confidence interval has widened materially. The prior forecast of $112,000 assumed institutional flows would accelerate; the revised forecast assumes they will flatline. That is a structural, not cyclical, reassessment. As Blockgeni has previously reported, the next significant market shift for crypto is most likely to come from regulators, not retail investors — a view Citi’s legislative concerns appear to echo.
How Serious Players Should Respond
For institutional investors and asset allocators, Citi’s note functions as a recalibration signal rather than an exit call. The bank’s base case still sits above current spot prices, which means the downgrade is a posture adjustment — from bullish conviction to cautious patience — not a recommendation to reduce exposure. Credible allocators should treat the zero ETF inflow assumption as a floor to watch, not a ceiling: any sustained reversal in weekly ETF data would be a leading indicator that Citi’s model is becoming too conservative.
For executives at digital asset treasury companies, the bank’s specific mention of potential selling pressure is a reputational consideration as much as a financial one. Public signals of de-risking from corporate Bitcoin holders carry outsized sentiment weight in a market already trading on thin institutional conviction. Firms in that category should be prepared to communicate treasury strategy clearly, proactively, and with reference to long-term holding rationale rather than short-term price movements.
For regulators and legislative staff on Capitol Hill, Citi’s direct attribution of investor hesitation to slow legislative progress is the kind of institutional signal that carries weight in budget and priority discussions. Recent Supreme Court rulings have already shifted the balance of power over crypto regulation toward the executive branch — a context that makes the pace of congressional action on digital asset frameworks not merely an industry concern, but a systemic one. The window to provide the policy clarity that could re-anchor institutional demand is open, but it is narrowing.
