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Citi predicts Bitcoin (BTC) will remain bullish, with a base-case target of $135K by the end of the year. The leading digital currency could reach $135,000 based on the bank’s valuation model, but a more optimistic outlook sees Bitcoin soaring to $199K.

Citi’s revised model, which focuses on three main price drivers—user adoption, macroeconomic factors, and inflows into spot Bitcoin ETFs—forms the basis of the new forecast. Citi analysts Alex Saunders and Nathaniel Rupert noted that the core valuation begins with a 20% increase in user growth using a linear network model, to support at $75,000. It’s expected that macroeconomic headwinds, weak stock markets, and underperforming gold will subtract approximately $3,200.

The analysts estimated that for every $1 billion in weekly inflows, the price of Bitcoin increases by roughly 4%, highlighting a strong correlation between ETF net flows and BTC returns. “Flows alone account for 41% of the variation in Bitcoin returns since launch; the relationship is equally strong when equity returns are considered.” We have seen just over $19 billion in flows so far this year, including $5.5 billion this month alone. For the rest of the year, we expect flows to continue,” Citi stated.

However, Citi anticipates net ETF inflows of about $15 billion, which could raise the base-case forecast to $135,000, about $63,000 higher. According to Citi’s most conservative projection, if equity markets remain under pressure and ETF inflows are insufficient, Bitcoin could drop to $64,000 by year’s end. Citi’s analysis indicates that ETF flows currently play a key role in their valuation model, accounting for more than 40% of BTC price movements..