Standard Chartered bitcoin forecast cut again as ETF outflows and Fed uncertainty weigh on crypto

Investors are reassessing digital asset risks after Standard Chartered issued a sharp downgrade to its long-term bitcoin forecast amid mounting macroeconomic concerns.

Standard Chartered trims 2026 crypto targets again

Standard Chartered has reduced its long-term Bitcoin price outlook for the second time in less than three months, underscoring growing caution around the asset. The bank now expects the cryptocurrency to reach a lower target by the end of 2026, although it did not publish a precise figure in the latest note.

According to the research, the new estimate marks a significant step down from the bank’s earlier projection, which had already been cut in December. Moreover, the tone of the report signals that previous bullish assumptions on digital assets are being reassessed as conditions change.

The downgrade was presented in a client note released on Thursday by Geoff Kendrick, the bank’s head of digital assets research. However, while the numerical targets have moved lower, Kendrick stressed that the analysis still contemplates eventual price recovery by 2026, even if the path proves volatile.

ETF outflows and Fed delay darken Bitcoin sentiment

According to Bloomberg, the bank’s more cautious stance reflects a mix of weakening macroeconomic conditions and changing investor behavior. Over the past month, the market downturn has intensified, and Bitcoin has fallen sharply from its October peak, eroding confidence among leveraged traders.

At the same time, US spot Bitcoin ETFs have recorded sizeable net outflows, reversing the strong inflows seen earlier in the cycle. That said, the report notes that these outflows have removed a critical source of structural demand, which previously helped fuel rallies and stabilize pullbacks.

Kendrick argued that slowing US growth momentum and reduced expectations for near-term Federal Reserve rate cuts have combined to pressure digital assets. Moreover, shrinking ETF holdings, in his view, amplify downside moves because they represent institutional capital stepping back from the market.

The interest-rate backdrop remains a central concern for cryptocurrency traders. Market participants have steadily pushed back their expectations for Fed easing, with many now anticipating that the first rate cut may arrive later in the year than previously thought. This repricing has tightened financial conditions and weighed on risk assets, including Bitcoin.

Kendrick also pointed to uncertainty over future Fed leadership as another element undermining conviction. However, he did not specify any particular candidate risk, instead framing the issue as part of a broader macro and policy fog that keeps some investors on the sidelines.

Investor capitulation risk and bitcoin forecast implications

The bank warned that deteriorating macroeconomic conditions and the potential for deeper investor capitulation could continue to pressure prices in the near term. In particular, it flagged the risk that longer-term holders might sell if volatility spikes again or if economic data deteriorate further.

Moreover, the analysis suggests that persistent ETF outflows could reinforce this capitulation dynamic, especially if retail demand does not return quickly. In such a scenario, liquidity conditions on major exchanges could tighten, leaving the market more vulnerable to abrupt downside moves.

Despite these risks, Kendrick emphasized that the current drawdown looks more orderly than previous crashes. The report notes that leverage levels appear more contained than in 2022, and that the market has not seen the same degree of forced liquidations or cross-platform contagion that followed the collapse of Terra/Luna and FTX.

On-chain activity points to healthier crypto market structure

Standard Chartered highlighted that on-chain data still paints a comparatively resilient picture. According to the bank, core network usage indicators show improvement, suggesting that Bitcoin and Ethereum are continuing to attract transacting users even as speculative interest has cooled.

For example, metrics related to on-chain activity and fees indicate that the underlying networks remain active. However, the bank cautioned that healthy usage alone may not be sufficient to offset macro headwinds if risk appetite continues to fall and liquidity tightens across global markets.

That said, the absence of high-profile platform failures in the current cycle marks an important contrast with 2022, when the implosions of Terra/Luna and FTX triggered widespread fear and credit stress. This time, the report argues, the structural plumbing of the crypto ecosystem appears more robust, even as token prices correct.

Ethereum target cut alongside Bitcoin

Alongside the Bitcoin downgrade, Standard Chartered also reduced its 2026 Ethereum price target. The note explains that, while the bank still expects Ether to reach that new level by the end of 2026, the path could involve a substantial decline first.

Moreover, analysts pointed out that Ethereum’s on-chain and network usage trends look comparatively healthy versus some other altcoins. However, macroeconomic pressures, tighter financial conditions and shifting investor positioning mean that Ether is unlikely to be fully insulated from broader crypto market weakness.

The bank did not provide a detailed breakdown of the assumptions behind the new ETH level in this summary. Instead, it framed the move as part of a wider reassessment of digital asset valuations in light of slower growth, delayed Fed easing and reduced institutional demand via ETFs.

Outlook for crypto under macroeconomic headwinds

Looking ahead, Standard Chartered reiterated that the coming quarters could remain challenging for digital assets as crypto macroeconomic headwinds persist. In particular, a prolonged period of higher-for-longer interest rates would likely cap upside scenarios and keep volatility elevated.

However, the bank still sees a potential for recovery by 2026 if inflation continues to moderate and central banks eventually transition toward easier policy. Under such conditions, renewed inflows into regulated products, such as spot Bitcoin ETFs, might restore some of the structural demand lost during the current outflow phase.

In summary, Standard Chartered’s latest research underscores a more cautious stance on Bitcoin and Ethereum, driven by ETF outflows, Fed uncertainty and the risk of investor capitulation. Yet it also stresses that the underlying networks appear healthier than during previous crises, leaving room for a longer-term rebound if macro conditions eventually improve.