Citigroup is becoming more cautious: Why Wall Street is suddenly slowing down on Bitcoin

• Citi lowers Bitcoin price target to $112,000
• Stagnant US legislation is slowing institutional demand and ETF momentum
• Scenarios range from $58,000 to $165,000 per Bitcoin
With the so-called “Clarity Act”, the United States is trying to create a basis for how crypto markets should work. A clear set of rules should create trust – and at least partially close the gaping gap between crypto and the traditional financial world.

Political standstill is becoming a brake on the crypto market

This planned regulation of the crypto market is making slow progress in the Senate, as Reuters reports. There are still disputes, especially with the “Clarity Act”, about how to deal with stablecoins and future supervision.

The background is complex. As Reuters reports, banks and the crypto industry are facing off on key issues. While providers from the crypto sector demand more leeway, banks see risks for deposits and stability of the financial system. At the same time, time is running out for political agreement. With a view to the 2026 midterm elections, the window of opportunity could continue to close, further increasing uncertainty.

Citigroup cuts expectations and reduces price targets

According to Reuters, Citigroup strategist Alex Saunders also explains how a breakthrough could be close this year: “Regulatory stimulus will drive further adoption and capital inflows, but the window of opportunity for US legislation this year is narrowing.”

The growing skepticism is forcing the US bank to reassess its price targets for the original cryptocurrencies Bitcoin and Ethereum. As Reuters reports, Citi reduced its 12-month price target for Bitcoin from $143,000 to $112,000. Ethereum also has less confidence in Citi and is lowering its expectation of $3,175, after it was previously at $4,304.

Between ETF hope and weak momentum: the market remains in waiting mode

But the market can’t do without positive signals. As investing.com quotes from the client note, Citigroup continues to expect significant inflows into exchange-traded crypto products. The bank expects around $10 billion for Bitcoin ETFs and around $2.5 billion for Ethereum.

At the same time, weaknesses are emerging that dampen optimism. According to the bank’s assessment, network activity on Ethereum remains below expectations, while institutional inflows have also recently been more subdued. According to Reuters, Citi therefore assumes that Bitcoin will initially move within a certain range. The mark of around 70,000 US dollars is considered an important reference point for the market.

Wide range shows uncertainty – from setback to rally

A look at the possible scenarios shows how great the uncertainty currently is. According to Reuters, Citigroup sees the Bitcoin price falling to as much as $58,000 in an unfavorable case. However, if demand increases and new impulses support the market, the bank also believes an increase to up to $165,000 is possible.

This means that development remains heavily dependent on external factors. In addition to the political situation, macroeconomic trends and capital flows also play a crucial role. For investors this means one thing above all: the market is waiting for clear signals.

Benedict Kurschat, editorial team at finanzen.net

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