- Citigroup predicts that ether (ETH) could end the year at $4,300, lower than its current trading price.
- The forecast includes a wide range, with a bullish scenario of $6,400 and a bearish outlook of $2,200 for ether.
- Analysts note most recent network growth has happened on layer-2 solutions, which may not fully benefit Ethereum’s core value.
- Citi estimates only 30% of layer-2 activity translates into ether’s valuation, suggesting prices are running ahead of on-chain activity.
- Exchange-traded fund (ETF) impact is smaller than Bitcoin’s, and macroeconomic conditions are expected to give only slight support to ether’s price.
Citigroup has released its latest price outlook for ether (ETH), setting a year-end target of $4,300. This projection would mark a drop from ether’s current price of about $4,515 as of the report’s publication.
The bank mapped out a broad possible range for ether, with a bullish scenario placing ETH at $6,400 and a bearish case dropping as low as $2,200. Analysts at Citi explained that network activity remains a key influence on ether’s valuation. However, they observed that much of the recent expansion has taken place on so-called layer-2 networks.
Layer-2 solutions are additional systems built on top of Ethereum’s main “layer-1” blockchain. Their purpose is to handle more transactions efficiently, but Citi stated that only about 30% of layer-2 network activity directly contributes to ether’s pricing on the base layer. The analysts believe this gap could explain why current ether prices are outpacing activity-based models, which may also be driven by increased investment and rising interest in tokenization and stablecoins.
The report also addressed the role of exchange-traded funds (ETFs) in influencing ether’s price. Citi noted that ETF inflows for ether are smaller than those for bitcoin (BTC), but each dollar has a comparatively larger impact on ether’s price due to its smaller market capitalization. Despite this, the bank forecasts ETF flows will “remain limited” because ether is less well-known among new investors.
Macroeconomic factors are expected to give only a little boost. With stock markets already close to Citi’s target for the S&P 500, analysts stated that they do not see major gains from risk assets like ether.
For more on digital asset treasuries and how they benefit cryptocurrencies, read Ether Bigger Beneficiary of Digital Asset Treasuries Than Bitcoin or Solana: StanChart.
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