Citi’s upgrade adds tier-one support to the recovery in crypto, which may encourage institutional buyers who have held back since bitcoin’s slide from its record high. The forecast’s reliance on steady ETF inflows makes weekly flow data a key signal, especially after last week’s sharp slowdown. The differing upside targets favour bitcoin over ether, which could shift relative positioning between the two after ether’s outperformance. Macro remains the swing factor, with dollar strength or a further rise in Treasury yields the main threats to the bank’s outlook.
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Earlier:
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Citi has turned more bullish on crypto, but its bet is on bitcoin rather than ether, the token that has done most of the running lately.
Summary:
- Citi raised its 12-month bitcoin target to $113,000 from $82,000 and ether to $3,028 from $2,240, Reuters reported.
- The bank cites stronger crypto activity, a supportive macro backdrop and resuming ETF inflows, with about $5 billion of inflows expected over 12 months.
- Citi said the Clarity Act’s failure in the Senate narrowed the path to legislation, but SEC rule announcements eased sentiment.
- Bitcoin has gained nearly 40% and ether about 68% over three months, trimming their year-to-date losses to about 4% and 9%.
- The targets imply about 31% upside for bitcoin against about 11% for ether.
Citigroup has raised its 12-month price forecasts for bitcoin and ether, pointing to stronger activity in crypto markets, a supportive macro backdrop and a return of inflows into exchange-traded funds.
In a note late last week, the bank lifted its bitcoin target to $113,000 from $82,000 and its ether forecast to $3,028 from $2,240, Reuters reported. Citi expects inflows into crypto to resume at a slower but steadier pace as financial advisers and brokerages gradually build allocations to bitcoin, and it forecasts around $5 billion of inflows over the next year.
The upgrade comes despite a regulatory setback. The US Senate failed to advance the Clarity Act, legislation intended to create a framework for digital asset markets. Citi said the bill’s failure narrowed the path to market-structure legislation but prompted rule announcements from the Securities and Exchange Commission that helped ease negative sentiment.
Crypto prices have rebounded strongly in recent months. Bitcoin has risen nearly 40% over the past three months and ether about 68%, cutting their losses for the year to roughly 4% and 9% respectively. Bitcoin’s recovery from its July lows has been helped by a softer dollar following the US Treasury’s move to buy back longer-dated bonds, according to Reuters.
The forecasts imply a notable gap between the two largest tokens. With bitcoin trading around $86,000 and ether near $2,700 when the targets were published, Citi’s numbers point to upside of about 31% for bitcoin but only about 11% for ether, despite ether’s stronger performance in recent months. One analysis of the note suggested that ether’s sharp rally has already captured much of its near-term upside, while bitcoin is better placed to benefit first from new institutional inflows.
The outlook still depends heavily on the broader macro picture. Citi cited a supportive backdrop, but some other banks see the dollar strengthening from here, which could weigh on crypto. With US Treasury yields near multi-decade highs, investors are also demanding more from assets that pay no income, raising the bar for the steady ETF flows that underpin Citi’s forecast.
This article was written by Eamonn Sheridan at investinglive.com.