Bitcoin and Ethereum prices have been volatile lately. The cryptocurrency market has undergone steep ups and downs over the past year, starting at about $93K, hitting a high of $126K in October, and then declining toward year-end. The crypto space has gained strength following Donald Trump’s election.
In early March 2025, there was an executive order by President Donald Trump to establish a strategic Bitcoin reserve for the United States. This expected move supported the cryptocurrency. However, Bitcoin has lost about 15% this year, though the asset added gains during the Iran war.
The cryptocurrency bitcoin has gained 9% over the past month and has added about 4.3% over the past week. iShares Bitcoin Trust ETF IBIT is up 6.1% past week andGrayscale Ethereum Staking Mini ETF ETH has jumped about 13.5% during the same timeframe.
Some market watchers believe that geopolitical risks position Bitcoin as a "digital gold" safe-haven, due to its borderless mobility, which becomes appealing during capital control fears., Fears of high inflation from rising oil prices have also bolstered Bitcoin prices lately. Historically, Bitcoin has occasionally hedged equities during such downturns.
Can the Rally Last?
However, the underlying political factor that has aided cryptocurrencies since Trump’s win is yet to show its effect. Efforts to advance U.S. crypto market-structure rules have stalled in the Senate, with the proposed Clarity Act facing diminishing chances of passage, per Reuters, as quoted on Yahoo Finance.
Political Risks Add Uncertainty
The outlook for crypto legislation could worsen if Democrats gain more seats in the United States Congress during the November midterm elections, as the party remains divided on crypto regulation. Passage of the bill would require support from at least seven Senate Democrats. Democrats are gearing up for the November midterms, increasingly targeting crypto ventures linked to Donald Trump’s family, as mentioned on DL News.
Citi Cuts Crypto Forecasts Amid Regulatory Delays
Citigroup has cut its 12-month price forecasts for Bitcoin and Ethereum, citing slower-than-expected progress on U.S. crypto legislation, per Reuters, as quoted on Yahoo Finance. The bank now expects Bitcoin to reach $112,000 (down from $143,000) and Ethereum to touch $3,175 (down from $4,304).
Citi strategist Alex Saunders noted that while regulatory clarity remains a crucial driver of adoption, the opportunity for meaningful U.S. legislation this year is rapidly closing, as mentioned in the same source.
Under a recessionary macro scenario, Citi sees Bitcoin falling as low as $58,000 and Ethereum to $1,198. However, in a bullish case fueled by stronger investor demand, Bitcoin could surge to $165,000 and Ethereum to $4,488.
ETFs in Focus
Against this backdrop, investors should keep a close track of Bitcoin ETFs like IBIT, Fidelity Wise Origin Bitcoin Fund FBTC, Grayscale Bitcoin Trust ETF GBTC and Grayscale Bitcoin Mini Trust ETF BTC. Meanwhile, Ethereum ETFs like iShares Ethereum Trust ETF ETHA, Grayscale Ethereum Staking ETF ETHE and Fidelity Ethereum Fund ETF FETH also demand close monitoring.
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This article originally published on Zacks Investment Research (zacks.com).