Citi has revised its outlook for the two largest cryptocurrencies, establishing 12-month price targets of $181,000 for Bitcoin and $5,400 for Ether. For the remainder of this year the bank expects more limited upside, forecasting year-end levels of $132,000 for Bitcoin and $4,500 for Ether.
In a research note, analyst Alex Saunders pointed to investor demand as the likely driver of additional gains next year, noting that both tokens are currently trading above statistical measures that are based on user activity.
The bank anticipates that the flow backdrop will remain constructive as institutional investors and financial advisers raise their crypto allocations. Citi singled out a favorable regulatory environment, particularly in the U.S., as a supporting factor for these inflows.
On the macro side, the firm said there are offsetting influences. Positive expected 12-month equity returns are contrasted with forecasts for a stronger U.S. dollar and, in Bitcoin's case, a weaker gold price. These macro factors act as counterweights to the expected inflows.
Citi expressed a preference for Bitcoin over Ether based on several attributes: the larger market size, a longer track record, and a clearer "digital-gold" narrative. The bank expects these characteristics to attract a larger share of incremental flows to Bitcoin.
According to Citi's adoption model, Bitcoin's model estimate sits at $83,000 with a range between $70,000 and $95,000. The bank attributes the current divergence above that model estimate to ETF flows and regulatory developments. Citi outlined scenario drivers for its range: the bear case assumes a recession and weaker equities, while the bull case assumes stronger than expected flows.
Forecasting Ether presents greater challenges, Citi warned. The bank cited difficulty in modeling user activity and uncertainty about how much value accrues to Ethereum from Layer-2 networks. Because of these modeling challenges, even relatively modest buying pressure can have an outsized effect on Ether's price.
"Flows remain crucial in explaining return variation, with Bitcoin flows explaining 42% of return variation. ETF flows into ETH have less exploratory power (18%) but have had a larger price impact," Citi said.
Market tickers reflected modest intraday gains in the sector, with BTC/USD up 0.81% and ETH/USD up 0.54% at the time cited.
For market participants, Citi's update underscores the role of investor flows and regulatory developments in shaping near- and medium-term crypto price dynamics. The firm favors Bitcoin for incremental allocation but flags significant modeling uncertainty for Ether driven by user behavior and Layer-2 value capture.