Citi Lifts Bitcoin Forecast to $113,000, Citing Renewed ETF Inflows

Citigroup has substantially increased its 12-month price forecasts for Bitcoin and Ether, citing renewed momentum from exchange-traded fund (ETF) inflows and a favorable macroeconomic environment. In a note to clients dated Wednesday, the brokerage lifted its target for Bitcoin to $113,000, a significant jump from its previous forecast of $82,000.

Upgraded Digital Asset Outlook

The bank's analysts also raised their 12-month forecast for Ether, the second-largest cryptocurrency, to $3,028 from $2,240. The upgrades are based on several factors, including a general increase in crypto market activity and a more supportive economic climate for risk assets.

Citi anticipates that capital will continue to flow into the sector, forecasting $5 billion of inflows over the next 12 months. The firm expects these inflows to resume at a "slower but steadier pace" as financial advisers and brokerages gradually increase their allocations to Bitcoin.

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Market Dynamics and Regulatory Context

The recent rally in digital assets has been supported by a softer U.S. dollar, which gained momentum after the U.S. Treasury announced it would buy back longer-dated bonds, according to the report. Bitcoin has surged 40% since its lows in July, while Ether has rallied nearly 68% over the past three months.

These gains have helped narrow the year-to-date losses for both assets to approximately 4% for Bitcoin and 9% for Ether. Citi also commented on the U.S. regulatory landscape, noting that while the Senate's failure to advance The Clarity Act narrowed the path for a comprehensive market structure bill, it also prompted the Securities and Exchange Commission (SEC) to issue rule announcements that "dampened negative sentiment."