Citibank: Ethereum price expected to fall to $4,300 by the end of the year

ChainCatcher News, according to CoinDesk, Wall Street giant Citigroup has released a new Ethereum price forecast, expecting its price to reach $4,300 by the end of the year, which would be a decline from the current price. However, this is only a baseline forecast scenario. The bank’s comprehensive assessment spans a wide range: in an optimistic scenario, the price of Ethereum would reach $6,400, while in a pessimistic scenario it would be $2,200.

Citigroup analysts said that network activity remains a key driver of Ethereum’s value. However, most of the recent growth has been occurring on layer 2 networks, and its “value transfer” to Ethereum’s underlying layer is still unclear. Citigroup assumes that only 30% of Layer 2 network activity contributes to Ethereum’s valuation. This suggests that the current price is higher than what its activity-based model predicts, which could be due to strong capital inflows and market enthusiasm driven by tokenization and stablecoins.

Citigroup expects that, given Ethereum’s relatively small market capitalization and its lower recognition among new investors, capital inflows will remain limited. Macro factors are considered to provide only limited support. With the stock market already nearing the bank’s target of 6,600 points for the S&P 500 index, analysts do not expect a significant rise in risk assets.