In a notable shift that underscores growing regulatory headwinds, analysts at Citigroup have significantly tempered their price expectations for Bitcoin and Ethereum for the remainder of 2024. The Wall Street giant now predicts that the two leading cryptocurrencies will not reach new all-time highs this year, citing a rapidly closing window for favorable U.S. legislation that could unlock institutional demand.
The revised outlook, published on Tuesday, reflects a more cautious stance on the near-term trajectory of digital assets. Citigroup’s updated 12-month targets see Bitcoin at $112,000 (down from $143,000) and Ethereum at $3,175 (down from $4,304). While these figures still represent substantial upside from current levels—approximately 50% for BTC from ~$74,360 and 62% for ETH from ~$2,314—they fall short of the record peaks both assets touched in March.
Regulatory Catalysts Diminish as Election Looms
The core of Citi’s revised forecast is a stark assessment of the U.S. political calendar. Alex Saunders, a Citi strategist, emphasized that “regulatory catalysts are essential for fostering greater adoption and inflows,” but the opportunity for meaningful, market-moving legislation is fading as the November mid-term elections approach.
The fate of the bipartisan Lummis-Gillibrand “CLARITY Act” (Crypto Market Structure and Investor Protection Act) is central to this analysis. For this comprehensive market structure bill to pass the Senate, it requires the support of at least seven Democratic senators to overcome a potential filibuster. With the election campaigning intensifying, the legislative bandwidth for complex crypto negotiations is severely constrained.
Scenario Planning: From Recession to Retail Frenzy
Citigroup’s report outlines a range of outcomes based on macroeconomic and regulatory developments. In a bearish scenario characterized by a U.S. recession, the bank’s analysts warn Bitcoin could fall to $58,000 and Ethereum to $1,198. Conversely, in a highly bullish scenario driven by strong retail investor demand and positive regulatory clarity, their models place Bitcoin at $165,000 and Ethereum at $4,488.
This wide band highlights the sector’s current dependency on external catalysts. Absent a clear regulatory green light from Washington, Citi suggests Bitcoin is likely to consolidate around the key $70,000 level as markets await electoral and legislative outcomes.
Time-Sensitive Negotiations in D.C.
The urgency of the legislative timeline was echoed by Alex Thorn, head of research at Galaxy Digital, who was cited by Bitcoinist on Tuesday. Thorn stated that if progress on a stablecoin-focused bill does not materialize this month, the chances of passing the broader CLARITY Act this year become “extremely low.”
Negotiations are currently focused on resolving disputes over stablecoin issuer requirements and supervision. However, Thorn noted that other complex issues—including the regulatory treatment of decentralized finance (DeFi), broader investor protection frameworks, and ethical considerations around digital assets—could further complicate and slow down the process.
The daily price action, with Bitcoin briefly surging above $74,000 in the last 24 hours according to TradingView.com charts, shows the market’s resilience. However, Citigroup’s analysis suggests this momentum may be difficult to sustain at record-breaking levels without a definitive, positive regulatory shift from the United States.
Featured image generated via OpenArt, chart data sourced from TradingView.com.
