Citi forecasts billions in inflows: is Bitcoin on the verge of a new bull run?

Institutional investors are returning to crypto, but this time the picture looks different. The big US bank Citi expects billions of dollars to flow back into the crypto market over the next twelve months. In a research note published on 1 October, the bank said financial advisers and brokerages are gradually rebuilding their exposure to Bitcoin. According to Citi, this will produce a slower but far more stable inflow of capital than during earlier speculative crypto rallies.

$5 billion

The bank forecasts roughly $5 billion of fresh inflows into the crypto sector over the next twelve months. Whereas earlier bull markets were often driven by retail investors and speculative trading, Citi sees institutional players entering the market as the dominant force this cycle. Financial advisers and asset managers are increasingly adding bitcoin as part of a diversified investment portfolio.

That growing interest comes at a time when the largest digital assets are staging an impressive recovery. Bitcoin has risen by almost 40 per cent over the past three months, while ether gained as much as 68 per cent over the same period. Thanks to that strong rebound, losses since the start of the year have shrunk considerably. Bitcoin now trades only about 4 per cent lower than at the start of the year, while ether is down around 9 per cent.

Since the July bottom, bitcoin has made a powerful comeback. The world’s largest cryptocurrency has gained about 40 per cent since then, leaving behind a period of underperformance relative to traditional risk assets.