Citi has lowered its 12-month price targets for bitcoin and ether after scrapping its ETF inflow assumptions, citing stalled U.S. crypto legislation and weakening investor demand.

The Wall Street bank cut its forecasts for bitcoin (BTC) and ether (ETH), pointing to a steep drop in exchange-traded fund inflows and fading hopes that U.S. regulatory progress would revive institutional interest.

Citi now expects bitcoin to reach $82,000 under its base case, down from $112,000, while ether is projected at $2,240, reduced from $3,175. The bank has also shifted to an assumption of zero net ETF inflows over the next year, reversing its earlier expectation that clearer regulation would unlock new institutional capital.

At the time of publication, bitcoin was trading near $58,400, with ether around $1,570.

“The absence of a catalyst for increased investor interest means we reduce our base-case flow expectations to zero over the next 12 months,” analyst Alex Saunders wrote in a Tuesday report.

U.S. spot bitcoin ETFs, which have been a key driver of institutional demand since launching in 2024, have recently seen significant outflows. In June alone, the funds recorded $4 billion in net withdrawals—the largest monthly total on record—after a 13-day redemption streak pushed year-to-date flows into negative territory.

The downgrade marks a sharp reversal from Citi’s previous outlook, which had assumed U.S. digital asset market structure legislation would accelerate adoption among financial advisors and traditional investors. The bank now sees that timeline as delayed, removing a major near-term catalyst for the market.

Saunders noted that ETF flows remain the dominant driver of crypto pricing, with recent data showing investors pulling back from risk exposure.

The report also flagged concerns that digital asset treasury (DAT) companies could become net sellers of bitcoin, a view reinforced by recent moves from Strategy, even though actual selling has been limited.

It added that both bitcoin and ether remain below key technical thresholds, including their 200-day moving averages, while speculative capital has increasingly rotated into AI-related equities.

Citi’s updated framework assumes flat ETF flows in its base case. In a bullish scenario, stronger institutional and retail demand could lift bitcoin to $108,000 and ether to $2,932. In a bearish scenario driven by recessionary conditions and continued ETF outflows, bitcoin could fall to $53,000 and ether to $1,094.

While Citi has turned more constructive on U.S. equities overall—offering some indirect support through cross-asset correlations—it said broader macro strength is not enough to offset weakening crypto-specific inflows.

Even so, the bank reiterated that ETF flows remain the single most important variable in its valuation model, noting that any rebound in demand or surprise regulatory progress could quickly change its outlook.