Citigroup has cut its 12-month price targets for both Bitcoin and Ethereum, citing stalled progress on the CLARITY Act as a key factor weighing on crypto market valuations heading into mid-2026.
The Wall Street bank’s revised forecasts reflect growing institutional concern that delayed U.S. crypto legislation is prolonging regulatory uncertainty, a headwind that Citigroup analysts believe will suppress capital inflows into digital assets.
Citigroup’s Revised Price Targets: What Changed
Citigroup’s research team lowered its 12-month Bitcoin forecast by approximately $58,000, according to a report from Crypto Times. The bank simultaneously reduced its Ethereum price target, though both revised figures represent levels the bank still considers achievable if legislative clarity materializes.
The downgrades were tied directly to the CLARITY Act, a proposed bill that would establish clearer jurisdictional boundaries for digital asset regulation in the United States. Citigroup’s analysts framed the legislative delay as a concrete barrier to institutional participation in crypto markets.
Despite the near-term cuts, Citigroup’s outlook is not entirely bearish. Seeking Alpha reported that the bank sees Bitcoin and Ethereum positioned for a 2026 comeback if crypto regulation advances, suggesting the revised targets could be raised again should Congress act.
Why the CLARITY Act Matters to Wall Street
The CLARITY Act aims to define which digital assets fall under the jurisdiction of the SEC versus the CFTC, a distinction that has created years of regulatory ambiguity. Without it, institutional investors face uncertain compliance obligations when allocating capital to crypto.
Citigroup’s logic is straightforward: until Congress passes legislation that clarifies the regulatory framework, large allocators will remain on the sidelines. That reduced demand translates directly into lower price targets in the bank’s valuation models.
The bill’s progress has stalled in Congress, with no firm vote schedule on the horizon. Analysis from Baker McKenzie earlier this year examined what the CLARITY Act delay reveals about the broader challenges facing crypto regulation in Washington, noting that jurisdictional turf battles between agencies continue to complicate legislative efforts.
For crypto-native readers, the dynamic is familiar. Regulatory uncertainty has been a recurring theme since 2022, but the difference now is that a specific, named bill exists, and its failure to advance is being cited by major banks as a quantifiable headwind.
Wall Street’s Shifting Crypto Outlook and What Comes Next
Citigroup’s move raises the question of whether other major banks will follow with similar downgrades. The revision aligns with a cautious tone across institutional research desks, where crypto price targets have increasingly been tied to regulatory milestones rather than purely technical or on-chain metrics.
The broader market context matters here. Bitcoin recently reclaimed the $75,000 level, and any gap between spot prices and Citigroup’s revised targets will determine whether the bank’s call reads as mildly bearish or deeply cautious.
Regulatory developments extend beyond the CLARITY Act. The SEC’s recent move to exclude crypto assets from certain OTC market rules shows that piecemeal regulatory shifts are happening even without comprehensive legislation.
The concrete catalyst to watch is any renewed Congressional activity on the CLARITY Act or competing crypto legislation. If the bill reaches a committee vote or gains new co-sponsors, Citigroup and other banks would likely revisit their targets. Until then, the bank’s message to clients is clear: legislative stagnation means lower ceilings for crypto valuations in 2026.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
