Citigroup just put out some new numbers on ether, and honestly, they’re a bit all over the place. The bank’s base case calls for ETH to hit $4,300 by the end of the year. Which is a little odd, because it’s actually trading a bit above that right now, around $4,515 or so. So that’s a forecast for a slight dip, not a rally.
But that’s just where things start. The full range of their prediction is, well, huge. Their absolute best-case scenario, if everything goes perfectly, sees ether soaring to $6,400. On the flip side, their worst-case bear outlook suggests it could plummet to $2,200. That’s a massive spread, and it tells you just how uncertain things are right now.
Where’s The Real Value?
The main thing Citi’s analysts are watching is network activity. They see that as the core driver of ether’s value. The problem, or maybe just the complication, is that a lot of the recent growth isn’t happening on Ethereum itself. It’s happening on these secondary networks built on top of it, called layer-2s.
And the big question is how much of the value from all that layer-2 activity actually trickles down to benefit the main Ethereum blockchain. Citi seems pretty cautious about it. Their model assumes only about 30% of that activity contributes to ETH’s price. Based on that math, they think the current price might be a bit ahead of itself, perhaps driven more by excitement and new money flowing in than pure fundamentals.
The ETF and Macro Wildcards
Then there’s the new ether ETFs. The bank notes that while the flows into these funds are smaller than what we saw with bitcoin ETFs, each dollar seems to have a bigger impact on ether’s price. That makes sense—it’s a smaller market, so new money moves the needle more. Still, they don’t expect a massive wave of investment from these products, mainly because ether isn’t as well-known to the average new investor as bitcoin is.
As for the broader economy? Don’t expect a huge tailwind there either. The analysts point out that U.S. stocks are already near the bank’s own year-end target for the S&P 500. With risk assets like equities not predicted to shoot much higher, there probably won’t be a major macro push to send crypto soaring. It seems like ether’s fate is really in its own hands, dependent on those tricky questions of utility and value.
