Citi slashed its 12-month price targets for bitcoin and ether on Tuesday, scrapping its previous ETF inflow forecasts after weeks of net outflows. The bank cited stalled U.S. crypto legislation and tepid investor demand as key drivers behind the downgrade, according to a CoinDesk report. The revised targets mark a sharp reversal from earlier bullish projections tied to spot ETF approvals.
The catalyst: spot ETF flows have dried up. After a surge in early 2026, inflows turned negative as regulatory progress in Washington ground to a halt. Citi’s analysts concluded that the near-term catalyst for mainstream adoption has faded, leaving prices exposed to macro headwinds and a lack of fresh capital. Ethereum faces the additional drag of a shifting DeFi narrative toward newer protocols.
Bitcoin fell in sympathy with the downgrade, while other major tokens also weakened. The broader crypto market now faces a critical test of support. Traditional finance players, however, are not uniformly bearish: Standard Chartered reiterated a bullish stance on the DeFi lending protocol Morpho, setting a $60 price target for 2030, citing vault growth and what it calls a projected 37x expansion in tokenized assets — a view that contrasts sharply with Citi’s caution.
Citi’s move underscores how dependent crypto prices have become on ETF flows. Should legislative progress resume or inflows return, sentiment could shift quickly. But for now, the bank sees limited upside absent a clear regulatory catalyst.