Citigroup has reduced its 12 month price outlook for both bitcoin and ether, pointing to slower progress in U.S. crypto legislation and softer market activity as key reasons behind the revision. The investment bank now expects bitcoin to reach 112000 dollars and ether to rise to 3175 dollars over the next year, both significantly lower than its previous forecasts. The update reflects a more cautious view on the pace of institutional adoption and highlights how closely digital asset prices remain tied to regulatory clarity and macroeconomic conditions across global markets.
The bank emphasized that exchange traded fund inflows continue to be the primary driver of demand for digital assets, though expectations for these inflows have been reduced. Citigroup now estimates that bitcoin related ETF demand could reach around 10 billion dollars over the next year, while ether related products may attract approximately 2.5 billion dollars. Despite this adjustment, analysts noted that ETF flows have remained relatively stable even during periods of geopolitical uncertainty and weaker investor sentiment, helping to support market prices at current levels.
Market conditions have remained subdued following bitcoin’s previous rally to record highs. Prices have struggled to maintain upward momentum, with both bitcoin and ether trading below key technical levels. Analysts say weaker network activity, reduced trading enthusiasm and broader macro uncertainty have contributed to slower growth across the crypto market. While bitcoin has managed to hold near important psychological support levels around 70000 dollars, ether has lagged behind, reflecting softer activity within its ecosystem and reduced demand for decentralized applications.
A major factor influencing the revised outlook is the slowdown in U.S. regulatory progress. Citigroup analysts believe the timeline for passing comprehensive digital asset legislation is becoming increasingly uncertain. Market expectations for such legislation being approved this year have declined to around 60 percent. Although global regulatory frameworks are gradually improving, analysts argue that clear and decisive policy action in the United States would provide a stronger catalyst for institutional investment than incremental regulatory updates or fragmented policy developments.
The proposed legislation, often seen as critical for the next phase of crypto market growth, aims to define how digital assets are classified and which regulatory bodies oversee them. By establishing clearer rules for exchanges, token issuers and market participants, the framework could reduce legal ambiguity that has historically limited large scale institutional involvement. However ongoing debates between policymakers and delays in legislative progress have slowed momentum, leaving market participants uncertain about the timing and impact of potential reforms.
Citigroup also outlined different scenarios for the future trajectory of the market. In a more optimistic outlook, stronger investor adoption through ETFs and improved regulatory clarity could push bitcoin toward higher valuation levels. In a more cautious scenario, weaker economic conditions and limited policy progress could keep prices under pressure. Analysts believe bitcoin may continue trading within a range in the near term as investors wait for clearer signals from both macroeconomic trends and regulatory developments.
The updated projections underscore how sensitive digital asset markets remain to external factors beyond pure supply and demand dynamics. While long term interest in cryptocurrencies continues to grow, near term performance is being shaped by policy decisions, institutional flows and broader financial conditions. As a result, investors are closely monitoring developments in Washington and global markets for indications of how the next phase of crypto adoption may unfold.
