Bitcoin has staged a strong recovery in recent weeks after a prolonged slump, and Citigroup expects the momentum to continue. On Thursday, the investment bank raised its 12-month Bitcoin price target to $113,000, up from its previous forecast of $82,000 — an increase of roughly 38% — citing renewed interest in cryptocurrencies and more favorable market sentiment as drivers of the upward pressure.

Citigroup also lifted its outlook for Ethereum, marking up its target for the second-largest cryptocurrency to $3,028 from $2,240, a raise of about 35%. Price targets from major Wall Street banks are closely tracked as a barometer of how traditional financial institutions view crypto, which makes the size of the revisions notable.

The bank forecast that demand for crypto-backed exchange-traded funds would fuel the price surge, with ETF inflows reaching $5 billion over the next year. Spot Bitcoin ETFs, which hold bitcoin directly and trade on U.S. exchanges, won regulatory approval in January 2024 and have since given conventional brokerage-account investors a way to gain exposure to the asset. Citigroup also pointed to the U.S. Treasury Department's decision to buy back longer-dated bonds and a weakening U.S. dollar as factors expected to revive momentum for digital assets.

The revised targets arrive after a year of stagnant or declining prices. Bitcoin fell from a high of $124,000 in October 2025 to a low of $58,000 in June. Its fortunes began to turn in mid-August, when the Treasury Department's bond-buyback announcement helped spur a price jump. By September, Bitcoin had crossed $80,000 for the first time in four months and has since traded around that level — meaning the new target implies further gains while still sitting below the October 2025 peak.

Citigroup noted that a recent reversal in ETF flows is likely to contribute to Bitcoin's rally. The year has been choppy for spot Bitcoin ETFs: in May and June, the funds recorded nearly $7 billion in outflows, according to data from analytics platform SoSoValue. The trend began to reverse in July, and spot Bitcoin ETFs surpassed $2 billion in inflows in September. Whether that pace holds is central to the bank's thesis, given its $5 billion inflow assumption for the year ahead.

The Treasury's bond-buyback announcement also helped weaken the dollar, giving Bitcoin an additional boost. Buybacks retire outstanding debt, reducing the supply of longer-dated Treasuries available to investors. Historically, a weaker dollar has made investors more willing to take risks, particularly in speculative assets such as cryptocurrencies.

The U.S. regulatory picture has also given crypto markets a lift. The Clarity Act, a bill that would have established broad rules for the crypto market, failed to advance in the Senate in mid-September. Bitcoin, however, held up better than some expected. Shortly afterward, the Securities and Exchange Commission moved to use its existing powers to write rules for the industry during the remainder of the current administration. Citigroup said those steps helped calm investors' concerns. With the legislative route stalled for now, the SEC's rule-writing process — along with the monthly flow of ETF data — is where the market's next signals on U.S. crypto policy and demand are most likely to emerge.

This story was originally featured on Fortune.com.