Citigroup Sees Ether Falling to $4,300 by Year-End, Highlights Layer-2 Influence

Wall Street heavyweight Citigroup (C) has released updated forecasts for ether (ETH), projecting a year-end price of $4,300—a decline from the current $4,515.

That figure represents the bank’s base case. Its forecast range is broad: the bull scenario sees ETH reaching $6,400, while the bear case drops as low as $2,200.

Analysts at Citi emphasized that network activity remains the primary driver of ether’s value. However, much of the recent growth has occurred on layer-2 networks, where the “pass-through” effect to Ethereum’s base layer is uncertain. Citi assumes that only 30% of layer-2 activity contributes to ether’s valuation, suggesting current prices are somewhat elevated compared to the activity-based model. The premium is likely fueled by strong inflows and excitement around tokenization and stablecoins.

For context, a layer-1 network represents Ethereum’s base blockchain infrastructure, while layer-2 solutions are separate off-chain systems built on top of it to improve scalability and efficiency.

Exchange-traded fund (ETF) flows also affect ETH prices, though on a smaller scale than bitcoin (BTC). Citi notes that while ETFs have a larger price impact per dollar, their influence is expected to remain limited due to ether’s smaller market capitalization and lower visibility with new investors.

Macro factors are projected to provide only modest support. With equities already approaching Citi’s S&P