Key Highlights
- Citi cuts its 12-month Bitcoin price forecast to $112,000 from $143,000 and Ethereum to $3,175 from $4,304.
- The downgrade is driven by stalled progress on the CLARITY Act in the U.S. Senate, with disagreements over stablecoin rules shrinking the window for 2026 passage.
- Under a recessionary scenario, Citi sees Bitcoin falling to $58,000 and Ether to $1,198, while its bull case puts Bitcoin at $165,000 and Ether at $4,488.
Citigroup has significantly lowered its 12-month price forecasts for the top two cryptocurrencies, Bitcoin and Ethereum, pointing to slow-moving U.S. legislative efforts that are narrowing the runway for regulatory catalysts this year.
The Wall Street brokerage now expects Bitcoin to reach $112,000 over the next 12 months, a notable down from its previous target of $143,000. Its Ethereum estimate was also trimmed to $3,175 from $4,304, according to a note published on Monday.
Citi’s Strategist Alex Saunders said in the note that while regulatory catalysts will drive further adoption and flows, the window of opportunity for U.S. legislation this year is narrowing.
At the center of the downgrade is the stalled progress on the Digital Asset Market Clarity Act, also known as CLARITY Act, in the Senate. The bill, which passed the House last July with a 294-134 vote, has been stuck in the Senate Banking Committee since January after a scheduled markup was pulled at the last moment over disagreements on stablecoin yield rules.
As The Crypto Times reported yesterday, DC Blockchain Week is currently underway with lawmakers and crypto leaders trying to break the impasse on the stablecoin yield compromise. Digital Chamber CEO Cody Carbone expressed confidence that a resolution could come within the week, though the bill still faces hurdles around DeFi oversight and token classification.
However, the broader timeline remains tight. Senate Majority Leader John Thune has indicated the bill is unlikely to clear the Banking Committee before April, and Galaxy Research Head Alex Thorn has warned that if it does not reach the Senate floor by early May, the chances of 2026 passage become extremely low.
Prediction market Polymarket currently puts the odds of the bill becoming law this year at 56%, down 9 points from recent highs.
Recession bear case and demand-driven bull case
Citi outlined a range of scenarios in the note. Under a recessionary macro backdrop, Bitcoin could drop as low as $58,000 and Ether to $1,198. On the other end, a bull case driven by stronger end-investor demand puts Bitcoin as high as $165,000 and Ether at $4,488.
As of 03:34 PM IST on Tuesday, Bitcoin was trading around $73,9388 and Ether around $2,315.
The bank flagged that Ethereum will be especially sensitive to user activity metrics, which have been weak recently. But it noted that stablecoin and tokenization trends may increase interest and usage going forward.
Midterm politics and the World Liberty Financial question
Citi also pointed to political risks that could further narrow the legislative window. The bank noted that chances for passing a crypto bill would shrink further if Democrats gain seats in the U.S. Congress in the November midterm elections, given that Democratic lawmakers remain more divided on overhauling federal rules to accommodate cryptocurrencies.
The bill needs support from at least seven Senate Democrats to pass. Some Democratic lawmakers are pushing for language that would bar elected officials from profiting from crypto ventures, an issue that has gained traction amid growing scrutiny of the Trump family’s World Liberty Financial project.
The scrutiny around World Liberty Financial has intensified in recent weeks. In February, over 40 House Democrats wrote to Treasury Secretary Scott Bessent demanding an investigation into possible conflicts of interest and national security concerns related to the venture. Senator Elizabeth Warren separately called for congressional scrutiny, labeling the situation “corruption, plain and simple.”
Analysts say the push to include anti-conflict-of-interest provisions could reduce the likelihood that President Donald Trump would sign the bill into law, adding yet another layer of uncertainty to the legislative path.
Other lawmakers have called for the bill to include tighter anti-money laundering rules, further complicating negotiations.
Citi expects Bitcoin to range-trade in the near term as markets wait for legislative news flow, with $70,000 flagged as an important level representing the pre-U.S. election price.
A sharp reversal from December’s optimism
The downgrade marks a notable shift from Citi’s December 2025 outlook, when the bank had set its base-case Bitcoin target at $143,000, a bull case of $189,000, and a bear case of $78,500. At the time, Saunders and his team had assumed that ETF inflows of around $15 billion and continued regulatory progress would support the rally.
Three months later, that optimism has faded. ETF inflows have been uneven, the CLARITY Act remains in limbo, and the macro picture has deteriorated. With midterm politics now entering the equation and the legislative calendar tightening by the week, Citi’s revised targets reflect a market that may have to wait longer than expected for the institutional catalysts it has been pricing in.
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