Citigroup has introduced one of the most bullish outlooks from a major Wall Street institution regarding digital assets, predicting significant price increases for Bitcoin and Ethereum in the coming year. These projections come at a time when cryptocurrency markets are grappling with short-term volatility, while long-term adoption trends continue to strengthen.
Positive Projections for Bitcoin and Ethereum
In a recent research note, Citigroup established a price target of $143,000 for Bitcoin within the next 12 months, suggesting approximately 62% upside potential from prices near $88,000 at the time of the prediction. Ethereum is also projected to fare well, with a target of $4,304, implying potential gains of around 46% from its value of about $2,950.
The bank noted that its forecasts reflect improving market conditions following recent downturns, asserting that cryptocurrency prices are now more aligned with measures of value linked to actual user activity. Citigroup emphasized its base case as a recovery scenario rather than an aggressive speculative call, indicating that valuations have adjusted following a decline from last October’s highs.
Moreover, Citigroup presented a range of possible outcomes. In a bullish scenario, Bitcoin could rise as high as $189,000, while Ethereum might reach $5,132. Conversely, if conditions turn bearish, Bitcoin could drop to $78,000, and Ethereum may fall to approximately $1,270, underscoring the persistent volatility in this asset class.
Regulatory Developments as a Positive Catalyst
Citigroup identified regulatory advancements as a central driver behind its positive stance. The bank highlighted a notable shift from U.S. authorities toward clearer, more tailored frameworks for digital assets, replacing years of regulatory uncertainty with defined rules. Several enforcement actions and lawsuits against major crypto platforms have been dismissed, a change that Citigroup believes could encourage institutional investors to re-enter the sector.
The bank also pointed to the pro-digital asset rhetoric from former President Donald Trump, coinciding with broader acceptance of cryptocurrencies within traditional finance. According to Citigroup, these policy shifts could potentially unlock new capital flows, particularly from institutions that have remained on the sidelines thus far.
Citigroup anticipates that regulatory clarity will promote adoption in spot markets, ETFs, and tokenized financial products over the coming year.
Short-Term Volatility Looms
Despite the optimistic forecasts, Citigroup acknowledged that recent market turbulence presents a significant headwind. Bitcoin experienced multi-month lows in November as investors reduced risk exposure amid concerns over rising valuations of technology stocks.
The market sentiment further weakened in December following a downward revision of projected earnings for 2025 by Strategy, previously known as MicroStrategy and the largest corporate holder of Bitcoin. Strategy’s remarks regarding prolonged Bitcoin weakness attracted heightened scrutiny due to its high exposure to the cryptocurrency.
Short-term technical indicators also suggest caution, as Bitcoin has formed a bearish flag pattern on the daily chart and remains below key moving averages and the Supertrend indicator. Analysts warn that Bitcoin’s price could decline towards $87,341 or even $85,188.
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