Citigroup has cut its 12-month price targets for bitcoin and ether, citing weaker momentum in U.S. crypto legislation, softer network activity and more conservative expectations for ETF inflows.

The bank now expects bitcoin (BTC) to reach $112,000 over the next year, down from a previous forecast of $143,000, while ether (ETH) is projected to climb to $3,175 from an earlier estimate of $4,304.

Even after the downgrade, both assets still imply meaningful upside from current levels. Bitcoin was trading near $74,000 at the time of writing, with ether around $2,330.

Citi said ETF inflows remain the key driver for higher prices, though it has lowered its assumptions. The bank now expects about $10 billion in bitcoin ETF inflows and $2.5 billion for ether over the next 12 months, even as recent demand has held up modestly despite geopolitical uncertainty.

The broader crypto market has struggled to regain strong momentum since bitcoin’s record highs in October. Prices have drifted lower as risk appetite cooled and post-halving enthusiasm faded. Bitcoin has traded below key technical levels, while ether has underperformed due to weak onchain activity. Still, steady ETF inflows have helped cushion the market against deeper declines amid macro and geopolitical headwinds.

Regulation in the U.S. remains a central factor in the outlook. Citi noted that the window for passing comprehensive crypto legislation this year is narrowing, with market-implied odds now around 60%. While global regulatory trends remain broadly supportive, the bank argued that a clear U.S. framework would be a more powerful catalyst for institutional flows than incremental policy steps.

At the center of the debate is the CLARITY Act, a sweeping proposal that has passed the House but remains stalled in the Senate as lawmakers negotiate competing versions.

The legislation is viewed as critical because it would clarify how digital assets are classified and resolve oversight between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission — a long-running source of regulatory uncertainty. By defining token categories and establishing registration frameworks for exchanges, the bill aims to reduce legal ambiguity and encourage greater institutional participation.

Citi also highlighted weakening market momentum since bitcoin’s October peak, pointing to futures liquidations, positioning fatigue and prices holding below key technical levels. In the near term, bitcoin may continue to trade within a range, with $70,000 seen as an important psychological level tied to pre-election pricing.

The bank outlined a range of potential outcomes. In a bullish scenario, stronger investor adoption — particularly via ETFs — could push bitcoin to $165,000 and ether to $4,488. In a bearish case driven by recessionary conditions, targets fall to $58,000 for BTC and $1,198 for ETH.

Ether’s outlook remains more uncertain, Citi said, given its reliance on network activity, which has recently been subdued. However, longer-term catalysts such as stablecoin growth, tokenization trends and potential regulatory developments around decentralized finance could help support demand going forward.