Citi Says Bitcoin Weakness Is Driven by Lack of New Demand, Lower Odds of CLARITY Act Passage

Citi said a lack of new demand is the main driver of Bitcoin's recent weakness.

In a report released June 3, the bank said flows for Bitcoin ETFs have recently turned into outflows. It also said the odds of passage for the CLARITY Act, a US crypto market structure bill that had been a catalyst for reviving interest among new investors, are declining.

Citi said recent Bitcoin sales by Strategy weighed on market sentiment but did not dictate actual price moves. The bank added that the sale was not unexpected. Strategy Executive Chairman Michael Saylor had previously indicated on the company's first-quarter earnings call that the firm intended to sell Bitcoin.

Citi said spot Bitcoin ETF flows remain the key variable for Bitcoin prices. By its estimates, spot ETF flows account for about 45% of changes in weekly Bitcoin returns.

Outflows from Bitcoin ETFs have continued. According to crypto data provider SoSoValue, Bitcoin ETFs recorded net outflows for 11 consecutive trading days, the longest daily outflow streak since the products launched in 2024.

Bitcoin's underperformance against stocks is also weighing on sentiment. Citi said a rebound in investor appetite is unlikely for now unless regulatory progress, including on the CLARITY Act, resumes or concerns about fiscal sustainability in major economies resurface.