Citigroup has revised its outlook on the cryptocurrency market, downgrading its 12-month price forecasts for Bitcoin and Ethereum. The financial institution now projects Bitcoin to reach $112,000, a decrease from its previous estimate of $143,000. Similarly, Ethereum's target has been lowered to $3,175 from $4,304.
The downgrade is attributed to the slow advancement of cryptocurrency legislation in the United States, particularly the stalled Clarity Act in the Senate. Disagreements over stablecoin regulations have hindered the bill's progress, narrowing the window for potential legislative catalysts in 2026. Citi strategist Alex Saunders noted that regulatory developments are crucial for further adoption and market flows, but the timeline for U. S. legislation is shrinking. The bank assigns a 60% probability to U. S. digital asset legislation passing this year.
The Clarity Act, which aims to provide a clear regulatory framework for digital assets, has faced obstacles in the Senate Banking Committee. A key point of contention is whether crypto platforms should be allowed to pay yield on stablecoin holdings. The delay in legislative progress has led to increased uncertainty and prompted Citi to adjust its market expectations.
Citigroup also considered a recessionary scenario in its analysis, suggesting that Bitcoin could fall to $58,000 and Ethereum to $1,198 in a downturn. Conversely, a more optimistic scenario could see Bitcoin reaching $165,000 and Ethereum climbing to $4,488. The revised forecasts reflect a more cautious outlook on the near-term potential of the crypto market, given the current regulatory landscape.
