Citi Research expects Bitcoin and Ether to stage a meaningful recovery in 2026, despite both cryptocurrencies being on track to end the current year with losses.
According to the analysis, persistent macroeconomic pressures and broader risk-asset weakness have outweighed the positive effects of growing regulatory clarity, leading to underperformance across major digital assets.
However, Citi believes these headwinds are temporary and that improving regulatory frameworks could lay the foundation for a strong rebound.
Bitcoin has experienced significant volatility over the past year. Although it reached a record high above $126,000 in October, prices have since retreated to around $88,000.
This pullback was largely attributed to leveraged long liquidations, which dampened investor risk appetite and slowed inflows into crypto exchange-traded funds (ETFs).
Since late November, Bitcoin has been consolidating within a relatively narrow trading range of $80,000 to $95,000 and is projected to close the year with a modest loss of approximately 6.5%.
Citi views this consolidation phase as a pause rather than a sign of structural weakness.
Looking ahead, Citi analyst Alex Saunders outlines a base-case scenario in which Bitcoin rises sharply to $143,000 within 12 months, driven primarily by increased institutional adoption and regulatory-driven capital inflows.
Ether is also expected to benefit from this improved environment, with Citi forecasting a rebound to $4,300 from current levels near $2,980.
Central to these projections is the assumption that investor confidence strengthens as regulatory uncertainty diminishes, encouraging renewed participation across both retail and institutional segments.
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Regulatory developments play a pivotal role in Citi’s outlook. In the United States, Congress is expected to advance additional digital asset legislation, including the bipartisan Digital Asset Market Clarity Act, which seeks to establish a comprehensive framework for crypto markets.
This follows the passage of the GENIUS Act, which introduced federal oversight for dollar-backed stablecoins.
Globally, regulatory momentum is also building, with the European Union implementing the Markets in Crypto-Assets (MiCA) regime and jurisdictions such as Hong Kong introducing stablecoin rules and licensing requirements for virtual asset trading platforms.
Citi estimates that up to $15 billion in ETF inflows could support Bitcoin prices, particularly if these flows coincide with favorable regulatory announcements.
Such clustering around positive news is expected to amplify market momentum. Nevertheless, the analysis also highlights risks.
The $70,000 level is identified as a key psychological support for Bitcoin, reflecting pre-election price levels before the victory of pro-crypto President Donald Trump.
In a recession-driven bear-case scenario, Citi sees Bitcoin potentially falling to $78,000.
Overall, Citi’s assessment suggests that while short-term challenges persist, the convergence of regulatory clarity, institutional adoption, and capital inflows could position Bitcoin and Ether for a strong comeback in 2026.
