Citigroup: Expects Ethereum price to drop to $4,300 by the end of the year

ChainCatcher news, according to CoinDesk, Wall Street giant Citigroup has released a new price forecast for Ethereum, expecting it to reach $4,300 by the end of the year, which is a decline from the current price. However, this is just the base case scenario. The bank's comprehensive assessment covers a wide range, with an optimistic scenario predicting Ethereum could reach $6,400, while a pessimistic scenario suggests it could drop to $2,200.

Citigroup analysts state that network activity remains a key driver of Ethereum's value, but most recent growth has occurred on Layer 2 networks, and its "value transfer" to the underlying Ethereum network is still unclear. Citigroup assumes that only 30% of Layer 2 network activity contributes to Ethereum's valuation, which means the current price is above its activity-based model prediction, possibly due to strong capital inflows and market enthusiasm driven by tokenization and stablecoins.

Citigroup expects that, given Ethereum's relatively small market capitalization and low recognition among new investors, its capital inflows will remain limited. Macroeconomic factors are believed to provide only limited support. As the stock market approaches the bank's target of 6,600 points for the S&P 500 index, analysts expect that risk assets will not see significant increases.