Citi cites declining ETF flows and fading US regulatory prospects as reasons for subdued Bitcoin outlook amid divergence from equities.
Bitcoin’s price drivers have deteriorated, with exchange-traded fund flows turning negative after accounting for 45% of weekly return variation, according to analysis. The shift marks a reversal from earlier inflows that fueled broader investor adoption and price gains.
Recent weeks have seen ETF demand weaken, while prospects for a US market structure bill—viewed as a potential catalyst for institutional interest—have dimmed. Bitcoin’s performance has also diverged sharply from equity markets, further weighing on sentiment.
The bank expects sentiment to remain subdued unless regulatory developments improve or fiscal concerns revive demand for hard assets as a hedge against currency debasement. Corporate treasury sales, such as Strategy’s tax-related disposal, are not seen as material near-term drivers.