Citi sets $4,300 year-end target for Ether, outlines $6,400 bull case

Investing.com -- Citigroup set a year-end target for Ether at $4,300, alongside a bull case of $6,400 and a bear case of $2,200. The bank’s framework, also used for its Bitcoin forecasts, combines activity metrics, macro conditions, and flows into exchange-traded funds (ETFs).

Ether’s value is more tightly linked to user activity than Bitcoin’s, Citi points out. While Bitcoin is seen as digital gold, Ethereum’s network depends on smart contract activity such as stablecoins, trading, and lending, the Wall Street firm said in a Monday note seen by Reuters.

Much of the recent growth has been on layer-2 (L2) chains built atop Ethereum, but “the value pass-through is uncertain,” analyst Alex Saunders said.

Citi assumes 30% accrual from L2 activity, noting that upgrades like Dencun lowered L2 fees and raised questions about how much value reverts to the main chain.

Current prices remain above Citi’s activity-based estimates, likely reflecting “buying pressure and exuberance around new use cases such as tokenization and stablecoins," Saunders said. The bank’s base case of $4,300 assumes modest demand and continued excitement around stablecoins and tokenization.

ETF flows play an outsized role. Although Ether inflows explain less of weekly return variation than Bitcoin, Citi found they move prices more sharply, with $1 billion in weekly flows tied to about a 6% price rise compared with 3% for Bitcoin.

Saunders added that these flows are “likely more persistent” because they come from advisors, sovereigns, and endowments. Still, the analyst expects them to remain smaller than Bitcoin’s, capped by Ether’s lower market capitalization and weaker profile among new investors.

Meanwhile, macro drivers remain important but subdued. Ether has the highest beta to equities and a negative beta to the U.S. dollar, Saunders highights. With equities trading close to the firm’s 6,600 S&P 500 target, the macro boost is limited, adding just 35 basis points to the forecast.

Citi’s scenarios diverge on activity and macro conditions. The bull case assumes rising demand tied to stablecoins, tokenization, and larger ETF inflows, while the bear case reflects a recessionary backdrop with falling equities and prices reverting to levels implied by current layer-1 activity.

“As we move towards year-end the uncertainty will drop, and the bull and bear cases move closer to our base-case,” Saunders wrote.

Citi said it will publish updated forecasts at the end of the quarter and extend projections to 2026.