Citi sees Bitcoin at $113,000 within a year. What would it take to get there? - Markets Weekender

Why Citi changed its mind on Bitcoin

Citi started 2026 with a $143,000 Bitcoin (BTC) target. It cut that to $112,000 in March, then to $82,000 in July, when ETF money was leaving and the bank worried that crypto treasury companies might turn into forced sellers. 

This week it reversed course. In a note dated Wednesday, the bank raised its 12-month target to $113,000 and lifted its Ether (ETH) call from $2,240 to $3,028.

The bank's reasoning rests on three changes since July. ETF flows came back, with US spot BTC funds swinging from about $5.8 billion in net outflows for the year in mid-July to a positive balance by late September. 

The SEC kept writing crypto rules after the CLARITY Act failed to pass in the Senate on September 15, which Citi said took the sting out of the bill's failure. 

And the Treasury's long-bond buybacks in August pulled crypto out of a summer slump in which it had lagged stocks and gold.

With BTC near the $84,000 to $85,000 range, getting to $113,000 means a gain of about 34%. Even then, the price would still sit below its all-time high above $126,000.

Bitcoin to $113,000: What would need to come together

1. Advisers have to keep buying

Citi's base case assumes $5 billion of inflows into crypto investment products over the next year, which it described as "slower but stickier" money from advisers and brokerages nudging client allocations up over time. 

That's a modest bar. US spot BTC ETFs took in $2.65 billion in September alone, per SoSoValue. 

2. Rules have to stand in for the law Congress didn't pass

Citi's view is that at this point in the election cycle, clear agency rulemaking can do much of the work the CLARITY Act would have done. 

This week's custody proposal (more below) fits that thesis, since it governs how the advisers Citi is counting on can hold crypto for clients. The bank also flagged a risk outside its forecast window: a change of administration in 2028 could undo rules that were written by agencies rather than passed by Congress.

3. The bond market has to stop climbing

The 10-year Treasury yield touched 5.34% on Thursday, its highest since 2002, capping the bond market's worst quarter this century. 

A day later, a soft jobs report pulled it back to around 5.2%. When a government bond pays more than 5% with no price risk, the case for holding something as volatile as BTC gets harder to make, so one cool data point may not be enough. Yields need to keep easing.

What traders are watching next

1. Weekly ETF flows: The nine-day inflow streak ended on September 30 with a $149 million outflow, according to SoSoValue. A run of red weeks would undercut the core of Citi's model.
2. Yields and the Fed: After Friday's jobs miss, the odds of an October rate hike fell to about 13% at the time of writing. September CPI on October 14 may decide whether that holds into the Fed's October 27 to 28 meeting.
3. A break above $87,000: BTC hiked to about $87,100 on Friday before slipping back below $85,000. That's the same ceiling that turned the September rally away at $87,400. A clean close above it may be the first sign the market is starting to price Citi's view.

📊 Markets recap

September payrolls came in at just 29,000, far short of the 90,000 economists expected. Unemployment rose to 4.2%. August was also revised down to 133,000. BTC spiked toward $87,000 on the news, then gave back about $2,000 within hours, while the Nasdaq rallied.

Crypto

• BTC: $84,000 to $87,100, after Friday's jobs-day spike faded.
• ETH: $2,650 to $2,775 after a record 70.6% gain in Q3.
• SOL: $113 to $124, holding near $119.
• XRP: $1.45 to $1.55, consolidating near $1.49, below the $1.60 level it reclaimed in late September.

Equities

• S&P 500: 7,723, up 0.7% Friday but still lower for the week and about 1% below its August record.
• Nasdaq Composite: 27,191, up 1.2% Friday after touching an intraday record, and the only major index to finish the week higher.
• Dow: 51,177, up 0.5% Friday but down for the week.

Micron posted record quarterly revenue of $54.2 billion, nearly four times last year's figure and guided to $61.5 billion next quarter. The stock barely moved, with investors weighing heavy factory spending against AI memory demand that shows no sign of easing.

Nike beat on profit but missed on sales, with revenue down 4% to $11.2 billion and Greater China down 26%. It forecast a high-single-digit revenue decline for the year and announced a restructuring that will bring layoffs in 2027. Shares fell about 3% after hours.

Commodities

• Gold: Approximately $4,140 to $4,215/oz, slipping Friday as the dollar firmed and higher yields kept pressure on a metal that pays no interest
• Oil: Brent at approximately $99 to $101 and WTI at $89 to $92, lower on the week as talk of emergency stockpile releases offset an earlier jump on China's halt to October fuel exports

Spot ETF flows

US spot BTC ETFs closed September with $2.65 billion in net inflows and spot ETH ETFs with $832 million, per SoSoValue. The week ending September 25 alone brought in $2.4 billion for BTC funds, the biggest week since October 2025 and enough to flip 2026 flows positive. 

The month ended on a softer note: all 12 BTC funds saw outflows on September 30, totalling $149 million.

🤖 AI tokens lead the pack

The best-performing corner of crypto in September wasn't BTC or ETH. It was AI. Grayscale's artificial intelligence sector rose more than 50% in September, more than double the 24% gain across the wider market.

NEAR led the group with a 183% monthly gain, followed by Venice, World and Bittensor. The sector also logged a single-day jump of nearly 10% on September 22, the same day BTC broke out toward $87,000.

Grayscale's longer-term argument is that AI agents will need blockchains for things banks don't handle well, such as instant machine-to-machine payments, proof that a user is human and open networks for training models.

Two caveats to note: the AI sector is still the smallest of Grayscale's six categories, worth about $15 billion even after September, so it doesn't take much money to move it. And the gains were concentrated in a handful of names. 

NEAR's run also hit a speed bump on Thursday, when its NEAR Intents service lost $3.8 million in an exploit, a reminder that young networks carry risks a 183% chart doesn't show.

🏛️ Regulation: The SEC finishes Its crypto to-do list

The SEC on Thursday proposed rules setting out how investment advisers and regulated funds can hold crypto on behalf of clients. Today, custody rules were written for stocks and bonds, leaving firms that manage client money unsure whether (and how) they can hold digital assets. 

The proposal spells out which companies qualify as custodians, permits state-chartered trust companies to act as one and sets record-keeping and audit requirements.

It also opens a narrow door for advisers to hold client crypto themselves, but only when no qualified custodian will take the asset, such as a newly launched token and only with a quarterly check on whether that has changed. 

The proposal is open for public comment for 60 days.

With this, the SEC has addressed every major crypto item Chairman Paul Atkins originally set out, following August's Regulation Crypto proposal and September's tokenization exemption. 

💼 Institutions: Wall Street moves onto crypto rails

Goldman Sachs opened its biggest Treasury fund to crypto firms, without turning it into a token. The bank's Financial Square Treasury Instruments Fund, a money market fund of roughly $100 billion, is now available through Lynq, a private, permissioned network built on Avalanche and used by more than 30 institutional trading firms. 

Those firms can now park idle cash in Goldman's fund and pull it out in near real time, instead of wiring money to a traditional brokerage and waiting for it to settle.

By contrast, BlackRock and Franklin Templeton issue their Treasury funds as tokens recorded on a blockchain. Goldman kept its fund exactly as it is and plugged it into a network crypto firms already use. 

It's a quieter route on-chain and a sign that big banks are willing to meet crypto firms where they settle money.

While on tokenization, tokenized stocks recently hit a record. Blockchain-based versions of US-listed shares reached a market value of $3.5 billion this week, up 33% in a month and about 860% from a year ago. The jump follows the SEC's five-year Innovation Exemption in September.

It's still a rounding error next to the US stock market, but it's the fastest-growing slice of tokenized assets this year.

🪙 El Salvador's payments go digital dollar

Five years after making BTC legal tender, El Salvador's everyday payments move is shifting to dollar-pegged stablecoins. 

A new remittance app called Sivar, which Bloomberg reported launched with government support, lets eligible users in the US send digital dollars home for a flat $2 fee. Remittances are a lifeline for the economy and BTC hardly caught on for spending.

The government is pushing back on the ‘pivot’ framing. The National Bitcoin Office called the reports "fake news" and said it has no plans to run any BTC, crypto or stablecoin wallet. Sivar is operated by a private company, Modveon, though El Salvador's Bitcoin Fund Management Agency is listed among its investors. 

Meanwhile, the national reserve keeps growing and now stands at 7,790 BTC.

🗓️  What's ahead

• October 7: The Fed releases minutes from its September 15–16 meeting, when it raised rates for the first time in three years
• October 13: Third-quarter bank earnings kick off with JPMorgan, Citi, Goldman Sachs and Wells Fargo

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