March 17 (Reuters) - Citigroup cut its 12-month forecast for bitcoin and ethereum, citing slow U.S. legislative progress that narrows the window for regulatory catalysts expected to boost ETF-driven demand and broader institutional adoption.
Progress on U.S. crypto market-structure legislation has stalled in the Senate, with the Clarity Act's chances of passage declining over disagreements on stablecoin rules and a shrinking window for approval in 2026.
The Wall Street brokerage lowered its 12-month bitcoin price forecast to $112,000 from $143,000 and its ethereum estimate to $3,175 from $4,304.
"Regulatory catalysts will drive further adoption and flows but the window of opportunity for U.S. legislation this year is narrowing," Citi strategist Alex Saunders said in a note on Monday.
Citi said that under a recessionary macro backdrop, bitcoin could drop to $58,000 and ether to $1,198, while its bull case, driven by stronger end-investor demand, puts bitcoin as high as $165,000 and ether at $4,488.
Bitcoin last traded around $74,298.11 and ether around $2345.51, as of 0750 GMT on Tuesday.
"ETH will be especially sensitive to user activity metrics, which have been weak recently, but stablecoin and tokenization trends may increase interest and usage," Citi added.
Chances for passing a crypto bill would shrink further if Democrats gain seats in the U.S. Congress in November mid-term elections, since Democratic lawmakers are more divided on overhauling federal rules to accommodate cryptocurrencies.
To pass, the bill needs support from at least seven Senate Democrats. Some Democrats are pushing for language that would bar elected officials from profiting from crypto ventures, an issue that has gained traction amid scrutiny of the Trump family's World Liberty Financial project. Analysts say that could reduce the likelihood that U.S. President Donald Trump would sign the bill into law.
"Bitcoin is likely to range-trade anticipating legislative news flow with (about) $70,000 an important level representing the pre-U.S. election price," Citi said.
Other lawmakers have called for the bill to include tighter anti-money laundering rules.
(Reporting by Joel Jose in Bengaluru; Editing by Sherry Jacob-Phillips)
