Citigroup Cuts 12-Month Price Forecast to $112,000, ETH to $3,175—Here’s Why
Despite the recent rise in prices, Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies by market capitalization, are not expected to reach new highs this year, according to Citigroup analysts.
The company significantly revised its forecasts for both cryptocurrencies on Tuesday, indicating concern over the slow pace of legislative progress in the United States, which limits the power of regulatory factors that could drive growing demand from institutional investors and exchange-traded funds (ETFs).
Bitcoin and Ethereum Price Objectives Revised Downward
Their latest reviewCitigroup lowered its 12-month price target for Bitcoin from $143,000 to $112,000, while Ethereum’s forecast was lowered from $4,304 to $3,175.
This suggests that, based on current trading prices, Bitcoin is predicted to increase by almost 50% in the remaining months of the year from $74,360. On the other hand, Ethereum will see a price increase of about 62% from its current level of 2,314 dollars per token within a year.
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Citi strategist Alex Saunders emphasized that at the time control catalysts are critical to spurring large-scale acquisitions and market penetration, the likelihood of significant US legislative action this year is diminishing.
The report also highlights that, under a weak economic environment, Bitcoin could see its price drop to $58,000, while Ethereum could drop to around $1,198.
Conversely, in a bullish scenario driven by high demand from end investors, the price of Bitcoin may reach $165,000, while Ethereum may rise to $4,488.
A Solid Timeline of Crypto Regulatory Progress
The upcoming mid-term elections in November further complicate the legal landscape of crypto-focused regulation. If the Democrats can get more seats in Congress, the chances of passing crypto market structure bill (CLARITY Act) can be reduced. For the bill to advance, support from 7 Senate Democrats is needed.
Citigroup analysts suggest that Bitcoin is likely to trade in a range while awaiting developments in the legal arena, with $70,000 serving as a key price point as the US election approaches.
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Earlier on Tuesday, Bitcoinist report that Alex Thorn from the research team at Galaxy Digital pointed out that time is of the essence. He warned that if progress is not made this month, the chances of passing the CLARITY Act this year will be “very good.”
While the talks in Washington DC are focused on solving the stablecoin rewards problem, Thorn highlighted that other challenges may arise. These challenges may include discussions about decentralized finance (DeFi), investor protection, and broader ethical considerations in the field of digital assets.
Featured image from OpenArt, chart from TradingView.com
