Citi updates its Bitcoin and Ethereum forecasts, issuing new target prices for 2027

Investing.com – Citi has set a 12-month price target of $181,000 for Bitcoin and $5,400 for Ethereum. The bank also anticipates further modest gains by the end of this year, projecting prices of $132,000 and $4,500, respectively.

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In a research report, analyst Alex Saunders notes that the primary driver for further gains in cryptocurrency prices next year will be investor demand. Currently, both tokens are trading above their “fair value” as estimated by statistical models based on user activity.

Citi expects the trend of capital inflows to persist as institutional investors and financial advisors continue to increase their allocations to crypto assets. Furthermore, a steadily improving regulatory environment in the United States is expected to provide additional support.

“The macroeconomic backdrop contains offsetting factors,” Citi writes. “Expected positive returns for the stock market over the next 12 months are countered by the prospect of a stronger U.S. dollar, while weaker gold prices act as a headwind for Bitcoin.”

Citi expresses a stronger preference for Bitcoin over Ethereum, citing Bitcoin’s larger scale, longer track record, and the clearer “digital gold” narrative—all of which are likely to attract a greater share of incremental capital inflows.

According to Citi, forecasts for Ethereum carry a higher degree of uncertainty, as modeling user activity is more complex and the value accrued from Layer-2 networks is difficult to quantify. Consequently, even relatively small buying activity could have a significant impact on its price.

“Capital flows remain a key factor in explaining return volatility,” Citi adds. “Flows into Bitcoin account for 42% of the variation in its returns. While capital inflows into Ethereum ETFs have a lower explanatory power (18%), their actual impact on the price is more pronounced.”