By Afnan Khalifah
Citigroup has lowered its price forecasts for Bitcoin and Ether, citing weaker-than-expected investor demand for cryptocurrency exchange-traded funds, according to Reuters. The bank said slower ETF inflows and shifting market conditions are likely to temper the growth of the two largest cryptocurrencies in the coming months.
Citi analysts said they have become more cautious after inflows into cryptocurrency exchange-traded funds, long viewed as a key source of demand for digital assets, fell short of expectations. According to Reuters, the bank cited weaker-than-expected ETF inflows and changing market conditions in lowering its price forecasts for both Bitcoin and Ether. Strong ETF demand had previously been one of the main reasons analysts expected the two cryptocurrencies to continue rising through 2026.
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Citi lowered its year-end price targets for both Bitcoin and Ether, the native cryptocurrency of the Ethereum blockchain. While the bank said both digital assets retain long-term growth potential, it now expects their gains to be more modest than previously forecast.
The Reuters report noted that cryptocurrency ETFs have become an important gauge of institutional interest in digital assets because they allow investors to gain exposure to cryptocurrencies without directly buying or holding the underlying tokens. Strong ETF inflows typically boost demand for assets such as Bitcoin and Ether, while weaker inflows can reduce the upward momentum in their prices.
Market participants continue to monitor economic data and central bank policy for clues about the outlook for risk assets, including cryptocurrencies. Interest rates, inflation, and broader financial market conditions remain key factors influencing demand for digital assets.
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Citi said the growing influence of institutional investors has made cryptocurrency exchange-traded fund flows an increasingly important indicator for Bitcoin and Ether. According to Reuters, the bank lowered its forecasts after ETF inflows fell short of expectations, suggesting institutional demand has been weaker than previously anticipated. Citi said the pace of future gains for the two cryptocurrencies will likely depend on whether ETF inflows recover and on broader macroeconomic conditions.