Wall Street giant Citi has challenged the prevailing market narrative that MicroStrategy’s recent Bitcoin sale is the primary driver of the cryptocurrency’s decline. In a fresh analysis, the bank argues that the true headwind for Bitcoin is not corporate selling pressure but a profound absence of new institutional demand.
Bitcoin’s price tumbled to around $65,000 after MicroStrategy (now rebranded as Strategy), the largest institutional BTC holder, executed a long-feared sale. Market panic initially focused on that liquidation, but Citi analysts view it as a routine tax-saving measure, not a signal of institutional bearishness. The more fundamental issue, they say, is the disappearance of new buying power.
According to a report cited by CoinDesk, Citi highlighted that inflows into spot Bitcoin exchange-traded funds (ETFs) have slowed dramatically after a robust start in early 2024. The bank noted that market sentiment has become “very subdued,” with institutional investors adopting a wait-and-see approach. The lack of fresh capital leaves the market without the momentum needed to break out of its sideways range.
A key factor dampening sentiment is the fading probability of the Clarity for Digital Tokens Act passing Congress this year. This bill was widely expected to provide a clear regulatory framework, acting as a powerful catalyst for large-scale institutional entry. With its chances diminishing, a critical source of optimism has evaporated.
Citi’s outlook suggests that unless there is an unexpected regulatory breakthrough, Bitcoin will likely continue its current sideways or downward trajectory. The core challenge is structural: the market needs a new wave of buyers, and the catalysts that could attract them are not materializing. The report reframes the weakness as a demand-side crisis, not a supply-side shock.
