Citi Adjusts Bitcoin and Ethereum Forecasts Amid Shifting Market Dynamics

Executive Summary

Citigroup has released revised cryptocurrency price targets, forecasting Bitcoin (BTC) to reach $133,000 by year-end 2025 and $181,000 in 12 months, and Ethereum (ETH) to hit $4,500 by year-end and $5,400 in 12 months, driven by institutional demand and exchange-traded fund inflows.

The Event in Detail

Citigroup has adjusted its year-end cryptocurrency targets, raising expectations for Ethereum while slightly reducing its forecast for Bitcoin. Analysts cited shifting investor preferences, yield opportunities, and broader macroeconomic pressures as primary drivers for these revised projections. The firm now projects Bitcoin to end 2025 at $133,000, approximately 12% above its current levels near $118,700, with a 12-month target of $181,000. This maintains confidence in long-term adoption, despite analysts noting Bitcoin is trading above adoption model estimates and facing macro headwinds such as a stronger U.S. dollar and weaker gold prices that have capped near-term upside. A bear case scenario suggests Bitcoin could drop to $83,000 if recessionary conditions materialize.

Conversely, Citi increased its forecast for Ethereum, expecting it to close 2025 at $4,500, nearly 3% higher than its current level of $4,375, and reach $5,440 within 12 months. This upward revision is attributed to stronger flows, Ethereum’s growing appeal as a yield-generating asset, and its structural advantages through staking and decentralized finance (DeFi) infrastructure. The momentum for Ethereum has been reinforced by rising institutional allocations and increased crypto exposure from financial advisors.

Financial Mechanics and Drivers

The revised forecasts are significantly underpinned by the sustained inflow of capital into cryptocurrency exchange-traded funds (ETFs) and corporate digital treasuries. Citi’s base case assumes $7.5 billion in year-end flows into Bitcoin through ETFs and corporate digital treasuries. Overall, Bitcoin ETFs have attracted over $58.4 billion in total inflows to date, with $21.5 billion in 2025 alone, including $7.8 billion in fresh inflows during Q3. For Ethereum, ETFs have attracted nearly $14 billion in net inflows to date. Recent data indicates ETH spot ETFs recorded a cumulative inflow of $755.22 million in the past week, with $80 million flowing in at the start of October and approximately $285.74 million in September.

These ETF inflows are considered a key barometer for institutional sentiment, creating a feedback loop where demand drives price appreciation, subsequently attracting further investment. Analysts highlight that Ethereum’s staking capabilities offer yield opportunities unavailable with Bitcoin, contributing to its appeal as a yield-bearing digital asset.

Market Implications

Citi’s updated projections, emanating from a major traditional financial institution, are expected to reinforce bullish sentiment and attract further institutional and retail investment, particularly through ETFs. This could influence future price movements for both Bitcoin and Ethereum. The long-term trajectory for both assets is viewed positively by Citi, with Bitcoin maintaining its role as a macro hedge and store of value, while Ethereum diversifies the market as a yield-bearing asset tied to DeFi activity.

Despite the positive outlook, macroeconomic headwinds remain a concern. A potential U.S. recession, which over 40% of market participants expected this year, could trigger a widespread sell-off across both traditional and cryptocurrency markets, given the significant correlation between crypto and tech stocks. However, the sustained inflows into crypto ETFs suggest a focus beyond short-term volatility among investors, signaling increasing confidence in regulatory approval processes and compliant investment products. Bloomberg ETF analyst James Seyfatt has predicted that staking on Ethereum funds could receive approval by the fourth quarter of 2025, a development that Markus Thielen, head of research at 10x Research, suggested could lead to substantial institutional money flowing into Ethereum, potentially surpassing Bitcoin ETFs.