Citigroup predicts Ethereum price will fall to $4,300 by year-end

Wall Street giant Citigroup has released a new Ethereum price forecast, predicting it will reach $4,300 by the end of the year, a decline from its current price. However, this is only a base case scenario. The bank's comprehensive assessment covers a wide range, with an optimistic scenario pegging the price at $6,400 and a pessimistic scenario at $2,200. Citi analysts stated that network activity remains a key driver of Ethereum's value, but most of the recent growth has occurred on Layer 2 networks, and the "value transfer" from Layer 2 to the underlying Ethereum network remains unclear. Citi assumes that only 30% of Layer 2 network activity contributes to Ethereum's valuation, meaning the current price is higher than its activity-based model, likely due to strong inflows and market enthusiasm driven by tokenization and stablecoins. Citi expects inflows to remain limited given Ethereum's small market capitalization and low awareness among new investors. Macro factors are believed to provide only limited support. With the stock market approaching the bank's target of 6,600 for the S&P 500, analysts do not anticipate a significant rally in risk assets. (CoinDesk)