Citi: 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 it to reach $4,300 by the end of the year, which is a drop from its current price. However, this is just the base case scenario. The bank’s comprehensive assessment covers a wide range, with an optimistic case estimating Ethereum’s price to reach $6,400, while the pessimistic case puts it at $2,200.

Citigroup analysts have stated 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 Ethereum’s underlying 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, potentially 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. Macro 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 predict that risk assets will not see significant increases.