Citigroup Cuts Bitcoin and Ethereum Targets Amid US Legislative Gridlock
The banking giant slashed 12-month price forecasts by over 20%, citing a lack of regulatory clarity in Washington.
Citigroup has significantly lowered its 12-month price targets for Bitcoin and Ethereum, warning that legislative delays in Washington are hindering the crypto market's long-term potential. The move signals a shift in sentiment as the bank ties asset valuations directly to the pace of US regulatory progress.
Citigroup reduced its 12-month Bitcoin target from $143,000 to $112,000, a 21.7% cut. Similarly, the bank slashed its Ethereum target by 26.2%, moving it from $4,304 down to $3,175. While the market has seen recent tactical gains, the bank warns that the absence of a clear regulatory framework is dampening the institutional adoption and ETF demand that previously supported more aggressive bull cases.
The Legislative Bottleneck
The primary point of contention is the Digital Asset Market CLARITY Act. Although the legislation was passed by the House, it remains stalled in the Senate. This legislative inertia is now reflected in prediction markets; according to data from Polymarket, the probability of the CLARITY Act passing in 2026 has dropped to approximately 39%, a sharp decline from 74% the previous month. This suggests growing skepticism among traders regarding the Senate's willingness to move the bill forward.
Impact on Institutional Adoption
Regulatory certainty is widely viewed as the essential catalyst for the next wave of institutional capital. Currently, the market exists in a contradictory state: spot Bitcoin ETFs have seen cumulative inflows of $56.3 billion, yet long-term forecasts are being trimmed.
Without a clear legal framework, large financial institutions may limit their exposure to digital assets to avoid legal ambiguity. This shift suggests that the "ceiling" for asset prices may be lower than previously anticipated, moving the market narrative away from a rapid breakout and toward a slower, more conditional growth path. The lack of a codified market structure means the industry remains dependent on tactical momentum and ETF flows rather than a fundamental shift in legal status.
Market Outlook
Investors are now watching to see if the Senate will yield to pressure to vote on the CLARITY Act. The core question remains whether the current price recovery can be sustained without the institutional confidence that only legislative clarity can provide. Until the act moves forward, the gap between retail enthusiasm and institutional commitment is likely to persist, keeping a lid on the aggressive price targets seen earlier this year.