Wall Street Giant Citi Has Released Its New Predictions for the Price of Bitcoin: “In a Pessimistic Scenario, $64,000; In an Optimistic Scenario…”

Wall Street bank Citi has released a new year-end Bitcoin forecast reflecting the evolving dynamics in the digital asset market.

Citi’s most optimistic scenario has Bitcoin reaching as high as $199,000 by the end of the year, while a more pessimistic scenario sees it plummet to an estimated $64,000, primarily due to weak stock performance.

Citi’s updated forecast considers three main factors: user adoption, macroeconomic conditions, and demand for spot exchange-traded funds (ETFs). The bank noted that these factors will significantly shape Bitcoin’s price.

At the heart of his company’s approach is an adoption model based on user activity. The bank’s analysts predict a 20% increase in user growth and linear network effects, noting that this factor alone could push Bitcoin’s price to around $75,000.

Macroeconomic factors, driven by weak stocks and gold performance, lowered the forecast by $3,200, while an estimated $15 billion in ETF inflows added $63,000 to the price estimate. Consequently, the base-case year-end target was set at $135,000.

ETF flows have become a central force in Bitcoin’s price action since the approval of US spot products in January 2024. Citi noted that these flows alone account for over 40% of the recent BTC price change and are given a major role in its new model.

The bank noted that while the adoption curve is still the cornerstone of the model, the integration of cryptocurrencies with traditional finance through ETFs, index inclusion, and growing regulatory acceptance is increasing the importance of macroeconomic and institutional flows.

Citi analysts say the risk to their forecast is on the upside. They note that ETF demand is growing faster than expected and user activity is declining slower than the model predicts, highlighting that network effects may persist longer than expected.

*This is not investment advice.