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 scenario. The bank’s comprehensive assessment covers an extremely wide range: in an optimistic scenario, Ethereum’s price would reach $6,400, while in a pessimistic scenario it would be $2,200.

Citigroup analysts said that network activity is still a 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 remains unclear. Citigroup assumes that only 30% of Layer 2 network activity contributes to Ethereum’s valuation, meaning the current price is higher than what its activity-based model predicts. This could be due to strong capital inflows and market enthusiasm brought about by tokenization and stablecoins.

Citigroup expects that, given Ethereum’s smaller market capitalization and lower recognition among new investors, capital inflows will remain limited. Macroeconomic factors are considered to provide only limited support. Since the stock market is close to the bank’s target of the S&P 500 at 6,600 points, analysts do not expect risk assets to see a significant rise.