Citi says weak investor demand and persistent ETF outflows are weighing on Bitcoin more than Strategy’s recent BTC sale.
Bitcoin News
Citi says Bitcoin’s recent sell-off is being driven more by weak investor demand than by Strategy’s small Bitcoin (BTC) sale.
The bank said Strategy’s sale affected sentiment, but that it was not the main force behind Bitcoin’s price action. Citi said Strategy Executive Chairman Michael Saylor had already discussed plans to sell certain tax-disadvantaged Bitcoin holdings as part of a portfolio optimization effort during the company’s first-quarter earnings call.
Bitcoin fell 9% after Sunday and dropped to its lowest level since March earlier on Wednesday. The decline came as spot Bitcoin exchange-traded funds continued to see outflows, pointing to weaker demand from new buyers.
ETF Flows Remain the Main Signal
Citi analyst Alex Saunders said spot Bitcoin ETF flows remain the key variable for Bitcoin prices. The bank estimates that ETF flows explain about 45% of weekly Bitcoin return variation.
Bitcoin ETFs have now recorded 11 consecutive trading days of net outflows, the longest daily outflow streak since the products launched in 2024, according to SoSoValue data cited in the report.
Citi said the outflows show a broader lack of fresh investor demand. The bank also said the weakening outlook for the CLARITY Act, a US crypto market structure bill, has reduced the chances of a near-term catalyst for renewed interest.
The bill had been seen as a possible driver of new investor participation. Without progress on regulation, Citi said sentiment may remain muted.
Bitcoin’s underperformance against equities is adding to that pressure. Citi warned demand may remain weak unless regulatory progress resumes or concerns about fiscal sustainability in major economies return.
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