Global financial group Citi raised its 12-month bitcoin price target to $113,000.

CoinPost, a blockchain media outlet, reported on Thursday that Citi raised its bitcoin target to $113,000 from $82,000. It also lifted ether to $3,028 from $2,240.

Citi forecast that funds would flow back into crypto markets as investment advisers and brokerages gradually increase bitcoin allocations. It said inflows would be steady even if the pace is slower than before. It put expected inflows over the next 12 months at about $5 billion.

A recent price rebound was also cited as a factor behind the higher outlook. Reuters reported that bitcoin and ether rose about 40 percent and 68 percent, respectively, over the past three months. Their year-to-date declines narrowed to about 4 percent and 9 percent, respectively. Dollar weakness after the U.S. Treasury's long-term bond buybacks was also cited as a factor supporting the crypto market rebound.

An assessment of changes in the U.S. regulatory environment was also reflected. The U.S. Senate recently rejected a motion to proceed to a vote on the 'Clarity bill' to establish a digital asset regulatory framework. That effectively put the brakes on the comprehensive market structure legislation the industry had been expecting.

Citi, however, focused on regulators' response after the legislative setback. It assessed that, while the chances of the bill passing fell, it spurred the U.S. Securities and Exchange Commission to issue rules and eased negative market sentiment. It said regulatory reforms at the administrative level were supporting investor sentiment as institutionalisation through Congress is delayed.

Some in the market also interpreted the impact of the legislative setback positively. Matt Hougan (맷 호건), chief investment officer at Bitwise, pointed out that bitcoin rose 8 percent and ether 7 percent after the Senate blocked the push. He praised the SEC's swift response and cited stablecoins, crypto exchanges, tokenisation platforms and yield-bearing tokens as areas expected to benefit.

Hougan said expected effects differ by segment. He focused on the lack of additional restrictions on rewards paid to stablecoin holders, and on reduced pressure on existing large exchanges to restructure businesses under new market structure rules. For tokenisation platforms and yield-bearing tokens, he said the SEC's actions helped reduce uncertainty over business operations.

He added that regulatory reforms at the administrative level do not guarantee the same degree of long-term stability as legislation. Hougan cited the possibility that the current friendly policy direction could change with a future change of administration and shifts in regulatory leadership as a risk factor. He said the speed of regulatory reforms is positive for markets in the short term, but that policy durability should also be examined over the longer term.