Citi Just Flipped the Script on Crypto’s Power Duo—And Ether Is the New Favorite

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

Wall Street just signaled a seismic shift in how institutional money views cryptocurrency. Citigroup raised its year-end outlook for ether while trimming its bitcoin forecast on Oct. 2, marking a potential inflection point in the ongoing debate over which digital asset deserves primacy in investor portfolios.

The move reflects a fundamental recalibration happening across financial markets: investors are increasingly favoring yield-generating assets over pure price appreciation plays, according to Reuters. For ether, that means its ability to generate returns through staking and decentralized finance platforms is finally translating into institutional preference over bitcoin’s straightforward “digital gold” proposition.

Don’t Miss:

Citi’s target of $4,500 for ether implies nearly 3% upside from its current trading level of $4,375, while bitcoin’s $133,000 target suggests roughly 12% upside from $118,747. Looking further ahead, the bank sees ether climbing to $5,440 over the next 12 months, with bitcoin reaching $181,000.

But the real insight isn’t in the price targets—it’s in the rationale behind them. Bitcoin’s forecast was revised lower due to offsetting macro factors including a stronger dollar and weaker gold prices, suggesting that even as bitcoin maintains its “digital gold” narrative, external market forces are creating headwinds.

Meanwhile, Citi analysts raised their year-end forecast for ether following the token’s sharp price jump over the summer as institutional investors and financial advisors ramped up crypto buying. The bank expects ether to end 2025 modestly higher, supported by strong inflows from exchange-traded funds and digital asset treasuries.

Trending: Microsoft’s Climate Innovation Fund Just Backed This Farmland Manager — And Accredited Investors Can Join the Same Fund

The shift toward ether reflects a maturing crypto market where fundamentals increasingly matter. While bitcoin’s supply cap and store-of-value thesis remain compelling, ether’s utility within the Ethereum network creates multiple revenue streams that resonate with traditional finance professionals trained to evaluate cash flows and yields.

Citi’s base case assumes robust year-end flows of $7.5 billion into bitcoin, but the bank’s bullish scenario for ether hinges on increased adoption and potential yield generation via staking and decentralized finance platforms—factors that could prove more durable than bitcoin’s reliance on investor sentiment alone.

The risk scenarios paint an equally revealing picture. Citi’s bear case sees bitcoin prices falling to $83,000 if recessionary macro conditions materialize, while ether’s downside is harder to model due to uncertainty around network activity and value accrual. That complexity might actually be an advantage, suggesting ether has more variables supporting its price than bitcoin’s more straightforward correlation to macro conditions.

See Also: Have $100k+ to invest? Charlie Munger says that’s the toughest milestone — don’t stall now. Get matched with a fiduciary advisor and keep building

Both tokens are trading above user-activity-based metrics, and Citi emphasized that sustained investor demand will be key to supporting prices through year-end and into 2026. Translation: current prices for both assets already price in significant optimism about future adoption.

For investors, Citi’s recalibration suggests considering allocation strategies that account for ether’s yield potential rather than treating all cryptocurrencies as undifferentiated speculative bets. The institutional shift toward ether doesn’t invalidate bitcoin’s investment case, but it does suggest that a diversified crypto portfolio might increasingly tilt toward assets that generate returns beyond pure price appreciation.

The bigger question isn’t which token wins, but whether traditional finance’s embrace of yield-generating crypto assets will accelerate institutional adoption or simply create a new category of correlated risk assets vulnerable to the same macro forces affecting stocks and bonds.

Read Next: Trade crypto futures on Plus500 with up to $200 in bonuses — no wallets, just price speculation and free paper trading to practice different strategies.

Image: Shutterstock

This article Citi Just Flipped the Script on Crypto’s Power Duo—And Ether Is the New Favorite originally appeared on Benzinga.com