Citigroup has slashed its 12-month price forecasts for bitcoin and ethereum, pointing to stalled U.S. crypto legislation as the primary catalyst for reduced institutional adoption and market uncertainty, with bank strategists warning that political divisions could further delay regulatory breakthroughs.
In a major revision that signals growing pessimism on the regulatory front, Citigroup has cut its 12-month price targets for bitcoin and ethereum, directly linking the move to slowing progress on U.S. crypto market-structure legislation. The bank’s strategists argue that a narrowing legislative window is eliminating key catalysts expected to drive institutional inflows through newly approved exchange-traded funds.
The core of the legislative delay centers on the Clarity Act, which has faltered in the Senate due to disagreements over stablecoin rules and a shrinking timeframe for passage in 2026. According to Reuters, this stall has prompted Citi to lower its bitcoin forecast to $112,000 from $143,000 and its ethereum estimate to $3,175 from $4,304.
The bank outlined a spectrum of scenarios, from severe recession to strong bull market conditions:
- Base case: Bitcoin at $112,000, ethereum at $3,175 (12-month targets)
- Recessionary scenario: Bitcoin could drop to $58,000, ethereum to $1,198
- Bull case: Bitcoin might reach $165,000, ethereum $4,488, driven by stronger end-investor demand
As of 0750 GMT on Tuesday, bitcoin last traded around $74,298.11 and ether around $2,345.51, data from Yahoo Finance and Yahoo Finance confirms.
Citi strategist Alex Saunders emphasized in the note that “regulatory catalysts will drive further adoption and flows but the window of opportunity for U.S. legislation this year is narrowing.” The analysis highlights ethereum’s particular vulnerability, noting that “ETH will be especially sensitive to user activity metrics, which have been weak recently, but stablecoin and tokenization trends may increase interest and usage.”
Political dynamics are exacerbating the legislative outlook. Chances of passing a crypto bill would shrink further if Democrats gain seats in the U.S. Congress in November mid-term elections, as Democratic lawmakers are more divided on overhauling federal rules. The bill requires support from at least seven Senate Democrats to pass, but some are pushing for language that would bar elected officials from profiting from crypto ventures—a provision gaining traction amid scrutiny of the Trump family’s World Liberty Financial project. Analysts suggest this could reduce the likelihood that President Donald Trump would sign the bill into law.
In the near term, Citi expects bitcoin to “range-trade anticipating legislative news flow with (about) $70,000 an important level representing the pre-U.S. election price.” Other lawmakers have also called for the bill to include tighter anti-money laundering rules, adding another layer of complexity to negotiations.
This downgrade is more than a simple forecast adjustment; it represents a concrete financial quantification of regulatory risk. Institutional adoption, particularly through ETFs, has been a primary engine for crypto price appreciation in recent years. With U.S. legislative momentum stalled, that engine is now sputtering, forcing Wall Street to recalibrate valuations downward. The bank’s recessionary scenario, while extreme, underscores how macro pressures could compound regulatory headwinds, creating a dual threat to crypto prices.
For investors, the message is clear: without clear U.S. regulatory pathways, the institutional influx that many predicted may remain elusive, locking cryptocurrencies in a holding pattern until Congress acts—or fails to act. The connection between legislative progress and price targets is now explicit, making every committee hearing and Senate negotiation a market-moving event.
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