Citigroup has set its year-end forecast for Ether (COIN:ETHUSD) at $4,300, with potential outcomes ranging from a bullish $6,400 to a bearish $2,200. The bank applied the same model it uses for Bitcoin, blending network activity, macroeconomic conditions, and ETF inflows to frame its projections.
According to Citi, Ether’s valuation is more closely tied to user engagement than Bitcoin’s. While Bitcoin often functions as “digital gold,” Ethereum’s ecosystem depends on applications like stablecoins, decentralized trading, and lending, the firm noted in a Monday report shared with Reuters.
Much of Ethereum’s recent momentum has come from layer-2 (L2) networks built on top of the main chain. However, “the value pass-through is uncertain,” analyst Alex Saunders cautioned. Citi assumes that 30% of value from L2 activity accrues back to Ethereum, with upgrades such as Dencun lowering fees on L2s and raising questions about how much benefit flows back to the base chain.
Ether’s market price currently sits above Citi’s activity-driven estimates, which Saunders attributed to “buying pressure and exuberance around new use cases such as tokenization and stablecoins.” The bank’s $4,300 baseline reflects steady demand combined with ongoing enthusiasm in those areas.
ETF inflows also play a pivotal role. While Ether fund flows account for less of weekly return swings than Bitcoin’s, Citi found they have a stronger price effect—around 6% for every $1 billion of inflows, compared with 3% for Bitcoin. Saunders observed that these flows are “likely more persistent” because they stem from advisors, sovereign wealth funds, and endowments. Still, Ether’s flows remain capped relative to Bitcoin due to its smaller market size and weaker recognition among newer investors.
Macro factors also weigh on the outlook, though their contribution is muted. Saunders pointed out that Ether has the strongest beta to equities and a negative beta to the U.S. dollar. With stocks already near Citi’s 6,600 S&P 500 target, the macro lift adds only 35 basis points to the forecast.
The bank’s scenarios diverge on both user activity and macro assumptions. The bull case assumes stronger demand from stablecoins, tokenization, and heavier ETF inflows, while the bear case envisions a recession, weaker equity markets, and prices realigning with 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 plans to release updated estimates at the end of the quarter, extending projections out to 2026.
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