Citigroup Revises 12-Month Bitcoin Price Prediction to $112,000 and Ethereum's to $3,175—Here’s Why

Citigroup analysts have adjusted their forecasts for Bitcoin (BTC) and Ethereum (ETH), indicating that despite a recent uptick in cryptocurrency prices, these digital assets are unlikely to reach new record highs within this year.

Key Takeaways

Citigroup has lowered its Bitcoin price target to $112,000 from $143,000 and Ethereum's forecast to $3,175 from $4,304.
Regulatory developments in the U.S. are progressing slowly, which may hinder institutional investment.
In a recessionary environment, Bitcoin could drop to $58,000, while Ethereum might see a fall to $1,198.
A bullish scenario could push Bitcoin's price to $165,000 and Ethereum to $4,488.
The outcome of upcoming mid-term elections could impact the legislative approval of the crypto market structure bill.

Bitcoin

Lowered Price Targets for Bitcoin and Ethereum

In a recent report, Citigroup revised down its 12-month forecast for Bitcoin, now estimating a target of $112,000, down from the previous $143,000. For Ethereum, the projection has decreased from $4,304 to $3,175. Based on current trading values, this means Bitcoin is expected to appreciate nearly 50% from its current price of $74,360, while Ethereum could rise approximately 62% from its present value of $2,314.

Citi strategist Alex Saunders pointed out that the absence of regulatory changes limits opportunities for increased demand from institutional investors and exchange-traded funds (ETFs). The report further notes that if economic conditions worsen, Bitcoin's value could fall to around $58,000, and Ethereum might decrease to approximately $1,198. In contrast, if demand surges from retail investors, Bitcoin could potentially hit $165,000, while Ethereum may climb to $4,488.

Legislative Challenges Ahead for Cryptocurrency

The legislative process for crypto regulation is also facing hurdles, particularly with the mid-term elections coming up in November. Should the Democratic Party secure more seats in Congress, the possibility of advancing the crypto market structure bill, known as the CLARITY Act, may dwindle. The bill requires support from seven Senate Democrats to move forward.

Citigroup analysts believe Bitcoin will likely move sideways in the coming months as it awaits more clarity on legislative developments. A price point of $70,000 will be closely monitored as the elections approach.

Earlier, Bitcoinist shared that Alex Thorn from Galaxy Digital emphasized the urgency of this situation. He warned that without significant progress this month, the likelihood of passing the CLARITY Act by year-end becomes "extremely low." As negotiations in Washington focus on the stablecoin rewards issue, Thorn cautioned that other issues may arise, including discussions about decentralized finance (DeFi), investor protections, and ethical considerations in the digital asset space.

Bitcoin The daily chart shows BTC’s price surge above $74,000 in the past 24 hours. Source: BTCUSDT on TradingView.com

Featured image from OpenArt, chart from TradingView.com