Citi raised its forecast on Ether and lowered it on bitcoin. Is "digital gold" weakening?

Citigroup has raised its short- and long-term forecast for Ethereum, the second largest cryptocurrency by market capitalization: it now expects it to grow by more than a quarter over the next year. In contrast, the bank slightly downgraded its assessment of bitcoin, the world's most valuable cryptocurrency, due to pressure from macroeconomic factors.

Citigroup raised its forecast for Ethereum to $4500 by the end of the year - that's almost 3% above the current level), and the target for the coming year was set at $5440, which implies growth of another 26%, Reuters reports. The bank noted, however, that the lower boundary of the cryptocurrency's price is difficult to predict - due to uncertainty around network activity and the distribution of value in the ecosystem. The investment bank analyst cited Ethereum's dramatic growth this summer and increased buying by institutional investors and financial advisors. In his opinion, further growth will be supported by inflows into crypto-ETF funds and digital treasuries, as well as the ability to generate additional income through staking and decentralized financial platforms (DeFi).

On the contrary, Citi has slightly lowered its bitcoin forecast for the end of the year - from $135,000 to $133,000. The new target assumes growth of about 12% from current levels. The analyst emphasized that investors increasingly prefer profitable Ethereum over bitcoin, which depends solely on price growth. Citi also cited contradictory macroeconomic factors - a strengthening dollar and falling gold prices - that will restrain bitcoin's growth for the rest of the year.

Nevertheless, on a 12-month horizon, the investment bank remains optimistic and expects bitcoin's value to rise to $181,000, i.e. by another more than 50% of the current price. Bitcoin is now worth more than models that take into account the pace of its actual usage suggest, but its "digital gold" narrative remains relevant and capable of attracting a significant portion of new flows, Citi believes. Its baseline forecast is for about $7.5 billion of new investment in bitcoin. "Bullish" scenario will depend on the growth of stock markets and strengthening demand, and in the "bearish" scenario in the event of a recession, the price of bitcoin could fall to $83,000, the analyst predicts.

On October 2, the bitcoin price was up 2.4% to $119,372. It has risen about 28% since the beginning of the year, thanks to regulatory victories that the crypto industry has been seeking for a long time. President Donald Trump, who has dubbed himself the "crypto president," and his family have been heavily involved in the sector over the past year, Reuters noted.

Ethereum also grew by about 2.4% to $4393, adding about 32% since the beginning of the year amid increasing government support and growing interest from institutional investors, The Motley Fool explains. The adoption of the GENIUS Act, which regulates the stablecoin market, was also an important factor: many leading tokens, including USDT and USDC, use the Ethereum blockchain, and their growing popularity could become a significant source of demand for Ethereum itself, according to the publication.

This article was AI-translated and verified by a human editor