Citigroup cuts 12-month bitcoin, ether targets as US crypto legislation stalls

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)