Citi Raises Ethereum Price Target,Cites Shift to Yield-Driven Crypto Demand
NEW YORK,October 26,2023 – Citigroup has increased its 6-12 month price target for Ethereum (ETH) to $2,850,anticipating a roughly 3% increase from current levels,while slightly lowering its Bitcoin (BTC) target to $133,000,representing approximately 12% upside. the revised forecasts reflect a growing trend of investor interest in yield-generating assets within the cryptocurrency space,favoring Ethereum’s staking and decentralized finance (DeFi) capabilities.
Citi projects even higher prices over the next year,modeling Ethereum at $5,440 and Bitcoin at $181,000,contingent on sustained healthy inflows and stable liquidity conditions.
The firm’s analysis highlights ethereum’s appeal to institutions and advisors seeking yield, noting a summer surge in activity driven by staking and DeFi opportunities. The increasing availability of regulated exchange-traded funds (ETFs) and corporate treasury allocations are expected to further broaden access and maintain consistent demand.
Bitcoin, while retaining its position as a “digital gold,” faces headwinds from a strengthening U.S.dollar and softer gold prices, prompting Citi to moderate its near-term expectations. The bank’s base case anticipates roughly $7.5 billion in year-end inflows for Bitcoin, with a stronger equity market and improved risk appetite perhaps boosting the bull case, while a recessionary habitat could hinder growth.
Citi outlines a bear case scenario for Bitcoin near $83,000 should economic growth falter and liquidity tighten. Determining Ethereum’s downside is more complex due to the potential disconnect between network activity and price. Both cryptocurrencies are currently trading above user-activity metrics, making sustained demand crucial for reaching price targets.
Ultimately, Citi concludes that the market’s trajectory hinges on continued liquidity and access. Ethereum is attracting incremental flows due to its yield-generating features and product design, while Bitcoin maintains its role as a macro hedge understood by institutions. Maintaining steady inflows into the fourth quarter is critical for Citi’s projected modest Ethereum outperformance and constructive Bitcoin outlook.
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