Citigroup Cuts Bitcoin and Ether Price Targets as U.S. Crypto Legislation Stalls

Citigroup has cut its 12-month price targets for bitcoin and ether, citing stalled U.S. crypto legislation as a primary reason. The bank reduced its forecast for bitcoin to $112,000 from $143,000 and for ether to $3,175 from $4,304. This marks a significant downward revision from previous projections.

The bank attributes the decision to slower legislative momentum, particularly around the stalled Clarity Act. The bill, which aims to provide regulatory clarity for digital assets, has faced delays due to disagreements over stablecoin rules and a shrinking legislative window. Citigroup highlighted that without clear regulatory frameworks, institutional flows are expected to remain constrained.

Citigroup strategist Alex Saunders emphasized that U.S. regulatory clarity is a stronger catalyst for institutional adoption than incremental rulemaking. The bank sees regulatory frameworks as essential for unlocking ETF-driven demand and broader institutional adoption. However, the narrowing window for the Clarity Act's passage has reduced market-implied odds to around 60%.

Why Did This Happen?

The Clarity Act's progress has been stalled in the U.S. Senate since January due to disagreements over stablecoin yield rules. Citigroup noted that the bill's passage requires support from at least seven Senate Democrats, but some lawmakers are pushing to include language that would bar elected officials from profiting from crypto ventures. This dynamic could reduce the likelihood of the bill's passage or signing by President Donald Trump.

Political divisions have further complicated the passage of the Clarity Act. Disagreements on stablecoin rules and concerns over how officials can engage with crypto have created hurdles. Citigroup noted that the November mid-term elections could further delay the bill, as Democratic lawmakers remain divided on overhauling federal rules for cryptocurrencies.

What Are Analysts Watching Next?

Without regulatory clarity, institutional capital is staying on the sidelines. Citigroup sees the Clarity Act as a key driver for ETF inflows, but the current political climate is pushing the potential for regulatory-driven demand into 2026. The bank outlined a wide range of potential outcomes, including a bear case where bitcoin could fall to $58,000 and ether to $1,198 under a recessionary macro backdrop. A strong demand scenario could see bitcoin reaching $165,000 and ether to $4,488.

Citigroup highlighted that the absence of clear market structure rules for cryptocurrencies could prevent large institutional capital inflows in the near term. The bank's strategist, Alex Saunders, emphasized that the legislative window is closing faster than expected, reducing the likelihood of major policy shifts before 2026.

Investor Outlook and Potential Price Ranges

Citigroup has lowered its ETF demand assumptions to $10 billion for bitcoin and $2.5 billion for ether. The bank warned that if Democrats gain more seats in the November mid-term elections, the chances of the bill passing could shrink further. The firm noted that a recessionary backdrop could push prices lower, but strong demand could still see significant gains.

Despite the downward revision, Citigroup acknowledged that large asset managers like BlackRock continue to invest in bitcoin. This suggests a divergence between regulatory uncertainty and long-term supply-side optimism. However, the bank remains cautious about the impact of delayed regulatory clarity on market momentum.