Citi Boosts Bitcoin, Ethereum Forecasts Amid Market Resilience

Citi has become more optimistic about the cryptocurrency market, raising its 12-month price targets for Bitcoin and Ethereum. The bank now expects Bitcoin to reach $113,000, up from its previous forecast of $82,000, while Ethereum is predicted to hit $3,028, a $788 increase from its previous target of $2,240.

The upgrades come as Bitcoin and Ethereum have held firm in recent days, with prices remaining steady at around $84,000 and $2,700, respectively. This resilience is a welcome sign for the market, which has been bolstered by stronger market activity, an improving macroeconomic backdrop, and the return of exchange-traded fund inflows.

According to Citi, institutional demand is expected to drive the market forward, with about $5 billion of net crypto inflows anticipated over the next 12 months. This would be a significant boost to the market, reversing the bank's more cautious view from July, which assumed no fresh ETF demand.

However, the rally still faces several challenges, including high bond yields, inconsistent ETF demand, and unresolved US regulation. The 10-year Treasury yield remains near 5.3%, making it a more attractive risk-free alternative to assets that generate no income. This could make it harder for the market to sustain its momentum.