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 is lower than the current price. However, this is only a baseline forecast. The bank’s comprehensive assessment covers a wide range: in an optimistic scenario, Ethereum’s price will reach $6,400, while in a pessimistic scenario it will be $2,200.

Citigroup analysts said that network activity is still the key driver of Ethereum’s value, but most of the 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 that the current price is higher than its activity-based model prediction—possibly due to strong capital inflows and market enthusiasm brought by tokenization and stablecoins.

Citigroup expects that, given Ethereum’s smaller market cap and lower recognition among new investors, capital inflows will remain limited. Macro factors are believed to provide only limited support. With the stock market nearing the bank’s target of 6,600 points for the S&P 500 index, analysts expect that risk assets will not see a major rise.