Citigroup has downgraded its 12-month price forecasts for Bitcoin and Ethereum, citing a slowdown in US cryptocurrency regulation. The global financial giant, known for its banking, investment, and wealth management operations, published a new research report explaining this move. The bank, which regularly provides commentary on digital assets, attributes the revision not to a change in its fundamental outlook on crypto, but rather to mounting regulatory uncertainties in the United States.
Price Target Revisions and Key Reasons
According to Citigroup’s latest report, the price target for Bitcoin has been reduced from $143,000 to $112,000, while Ethereum’s target was cut from $4,304 to $3,175. Analysts noted that this adjustment does not reflect a reevaluation of cryptocurrencies as an asset class, but instead responds to slow progress on major industry bills like the CLARITY Act in the US Congress. Previous forecasts were built on expectations that clearer regulation would fuel institutional adoption. However, Citigroup emphasized that the likelihood of significant crypto legislation passing in the current congressional session has sharply diminished.
Institutional Demand and Market Behavior
Following the green light for spot Bitcoin ETFs in January 2024, institutional interest in crypto assets experienced a noticeable uptick. Citigroup’s analysis finds, however, that continuing regulatory uncertainty is holding back participation from major market players and tempering inflows into these exchange-traded funds. Institutional funds are largely waiting for a more defined legal framework before making large moves, and this reluctance is delaying both new product rollouts and broader risk-taking in the sector.
Still, leading asset managers like BlackRock and Fidelity have recently committed substantial investments to Bitcoin and Ethereum ETFs. Additionally, MicroStrategy increased its Bitcoin holdings by another 22,337 coins last week, while Metaplanet secured $531 million to bolster its own Bitcoin portfolio. These developments suggest that, despite regulatory hurdles, key institutional players remain active within the crypto ecosystem.
In another sign of continued industry momentum, T. Rowe Price recently filed an application for a new crypto ETF, indicating that some market participants are pressing ahead despite unclear regulatory conditions. Analysts highlighted that institutional applications for crypto products can still proceed even without finalized legal guidelines.
Comparing Price Forecasts from Major Institutions
Citigroup’s new 12-month Bitcoin target lags behind projections from other leading institutions. Standard Chartered sees Bitcoin reaching $150,000 by the end of 2026, and Bernstein offers a long-term projection of $200,000. By contrast, Citigroup’s revised estimate surpasses JP Morgan’s shorter-term fair value calculation of $170,000. For Ethereum, Citigroup’s target of $3,175 falls well below Standard Chartered’s $7,500, VanEck’s $11,849 by 2030, and Galaxy Digital’s forecast of more than $5,500.
Despite these diverging forecasts, there is an overall sense of cautious optimism about Bitcoin and Ethereum’s long-term prospects within the crypto market. What sets Citigroup’s latest assessment apart is its greater emphasis on the risks stemming from regulatory delays in the US. Should there be further setbacks in advancing legislation like the CLARITY Act, Citigroup believes its more conservative price targets could prove to be the most realistic in the short and medium term.
