Citi said progress on U.S. digital asset legislation has slowed, prompting a more cautious outlook on parts of the sector even as it maintained select stock preferences tied to company-specific drivers.
The brokerage said momentum around the proposed CLARITY Act remains stalled as lawmakers and industry participants continue to debate key provisions, including stablecoin incentives. While a revised version could emerge by late March, Citi said passage timelines into April or May may require compromises.
Against that backdrop, Citi reiterated Circle Internet Financial and Bullish as its top picks. It said Circle could benefit from broader use of stablecoins such as USDC beyond crypto trading into payments and automated, or “agentic,” commerce. Bullish, meanwhile, is gaining traction with U.S. institutional clients, supported by strong recent trading volumes.
Citi downgraded Gemini to Sell, citing concerns about its ability to reach sustainable profitability following restructuring and its exit from some international markets. The brokerage cut its price target to $5.50 from $13.00 and said competitive pressures and weaker crypto conditions could limit its scale.
The bank also lowered price targets across several crypto-linked stocks after revising its forecasts for Bitcoin and Ethereum. It now expects Bitcoin to reach $112,000, down from $143,000 previously, and adjusted valuations for companies including MicroStrategy and Riot Platforms.
Citi said slower legislative progress and softer crypto price assumptions could weigh on near-term sentiment, even as longer-term themes such as tokenization and stablecoin adoption remain intact.
source https://www.investing.com/news/stock-market-news/citi-downgrades-gemini-flags-stalled-us-crypto-legislation-4568929
