Citigroup Slashes BTC and ETH Forecasts Amid Stalled Crypto Legislation

Major investment bank Citigroup has significantly reduced its 12-month price forecasts for bitcoin and ether, citing slower progress on U.S. crypto legislation as a primary concern alongside weakening network fundamentals. The bank now projects BTC will reach $112,000 and ETH $3,175 over the coming year—substantial downgrades from previous estimates of $143,000 and $4,304 respectively. At the time of the analysis, bitcoin traded near $70,930 while ether hovered around $2,160.

Revised Targets Reflect Regulatory Headwinds

The downward revision underscores mounting concerns about the timeline for meaningful crypto legislation in the United States. Despite the price reductions, Citigroup’s new targets still imply meaningful upside potential from current levels. However, the revised forecasts acknowledge that the path forward faces significant obstacles, particularly around regulatory clarity and institutional confidence.

According to analyst Alex Saunders, the deteriorating legislative outlook represents a critical constraint on market momentum. “ETF demand remains our primary positive factor, but we’ve had to recalibrate our assumptions to $10 billion for bitcoin and $2.5 billion for ether annually,” Saunders noted in the report. The analyst indicated that market-implied odds for passing comprehensive digital asset legislation this year have slipped to approximately 60%, narrowing the window for congressional action.

How Crypto Legislation Impacts Institutional Deployment

The critical issue driving this recalibration centers on regulatory framework clarification. The stalled CLARITY Act—a sweeping market structure bill that cleared the House but remains deadlocked in the Senate—exemplifies the broader regulatory logjam affecting investor confidence. This legislation would establish clear classification standards for digital assets and resolve a long-running jurisdictional dispute between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Until these regulatory boundaries are clearly defined, institutional investors remain hesitant about committing significant capital to crypto markets. The current ambiguity creates operational uncertainty for exchanges, custodians, and trading platforms regarding which regulatory body has oversight authority. Without comprehensive crypto legislation providing explicit categorization frameworks and registration requirements, the institutional allocation question remains largely unanswered.

ETF Flows Provide Stabilization Despite Market Weakness

Despite regulatory headwinds, ETF inflows have proven resilient and continue serving as the primary stabilizing force for crypto valuations. The market has struggled to maintain momentum following bitcoin’s record-high run in October, with prices subsequently retreating amid weak risk appetite and fading post-halving enthusiasm. Technical levels have deteriorated, with bitcoin trading below critical support zones and ether underperforming more broadly due to lackluster onchain activity.

Citi analysts flagged several technical concerns: futures liquidations, positioning fatigue, and the psychological importance of the $70,000 level tied to pre-election pricing dynamics. Nevertheless, consistent ETF demand has absorbed selling pressure and prevented sharper declines, demonstrating that regulatory uncertainty is being partially offset by sustained institutional buying interest through passive vehicles.

Bull and Bear Cases Hinge on Legislative Progress

Citigroup’s scenario analysis reveals how critically crypto legislation shapes institutional outlook. In the bull case scenario—powered by accelerating end-investor adoption through ETFs and comprehensive regulatory clarity—bitcoin targets reach $165,000 and ether $4,488. This upside case requires both sustained ETF demand and breakthrough progress on U.S. crypto legislation that legitimizes institutional participation.

Conversely, the bear case reflects recessionary macro conditions coupled with continued regulatory ambiguity, yielding conservative targets of $58,000 for BTC and $1,198 for ETH. Ether’s outlook remains particularly uncertain, the report emphasized, given its elevated sensitivity to onchain activity metrics which have recently weakened. However, potential catalysts including stablecoin growth acceleration, tokenization trends expansion, and possible regulatory focus on DeFi infrastructure could revitalize usage and valuations.

The underlying thesis remains constant: meaningful progress on comprehensive crypto legislation would serve as a stronger institutional catalyst than incremental, fragmented rulemaking by individual agencies.