Wall Street investment bank Citigroup lowered its 12-month price targets for bitcoin BTC$74,064.92 and ether (ETH), citing slower legislative momentum in the U.S., softer network activity, and reduced expectations for ETF inflows.

Citi now sees bitcoin reaching $112,000 and ether $3,175 over the next year, down sharply from prior forecasts of $143,000 and $4,304.

The revised targets still suggest substantial upside. Bitcoin was trading around $74,000 at the time of publication. Ether was at $2,330.

The bank said inflows remain the key upside driver, though it lowered its 12-month demand assumptions, even as recent ETF demand has picked up modestly despite geopolitical uncertainty.

"ETF demand where we reduce the assumption to $10 billion BTC$74,064.92 and $2.5 billion (ETH) is still the most important positive factor," analyst Alex Saunders said in the Monday report.

Crypto markets have struggled to regain momentum after bitcoin’s run to record highs in October, with prices drifting lower amid weak risk appetite and fading post-halving enthusiasm. BTC has traded below key technical levels, while ether has lagged further, weighed by soft onchain activity. Despite the subdued price action, ETF inflows have remained resilient, helping to stabilize the market even as broader macro uncertainty and geopolitical tensions continue to cap upside.

According to Saunders, the outlook hinges heavily on U.S. regulation. The analyst said the window to pass digital asset legislation this year is narrowing, with market-implied odds falling to around 60%. While broader global policy remains supportive, he argued that headline U.S. legislation would be a stronger catalyst for institutional flows than incremental rulemaking.

The CLARITY Act, a sweeping U.S. crypto market-structure bill, has cleared the House but remains stalled in the Senate as lawmakers negotiate competing proposals, leaving its path forward uncertain.

The legislation is seen as critical because it would establish clear rules for how digital assets are classified and which agencies oversee them, resolving a long-running turf battle between the Securities and Exchange Commission (SEC) and The Commodity Futures Trading Commission (CFTC) that has created legal ambiguity for investors and firms.

By defining categories of tokens and setting registration frameworks for exchanges, the bill aims to reduce regulatory risk and provide the certainty many institutional investors need before allocating more capital to crypto markets.

The analyst also flagged weakening momentum in the crypto market since bitcoin’s October peak, citing futures liquidations, positioning fatigue, and prices sitting below key technical levels. Bitcoin may continue to range trade, with around $70,000 seen as an important psychological level tied to pre-election pricing.

In the bank's framework, the bull case depends on stronger end-investor adoption, particularly via ETFs, with a target of $165,000 for bitcoin and $4,488 for ether. The bear case reflects recessionary macro conditions, with targets of $58,000 for BTC and $1,198 for ETH.

Ether’s outlook is more uncertain, the report said, given its sensitivity to onchain activity, which has recently been weak. Still, there is potential upside from stablecoin growth, tokenization trends and possible regulatory focus on DeFi, which could lift usage and demand.

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