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View detailsThe market believes that a rate cut in October is "certain", but some senior officials of the Federal Reserve do not see it that way
On Monday this week, several local federal reserve bank presidents spoke out intensively, refuting the view that "a rate cut next month is a certainty." They emphasized that even if policymakers need to strike a balance between preventing excessive tightening and fighting inflation, they should not adopt loose policies too quickly. However, the market seems to have ignored these hawkish warnings. According to the trading data of federal funds futures, investors and Wall Street analysts still firmly believe that easing policies are on the horizon. According to the CME FedWatch tool, approximately 90% of investors are betting that the Federal Reserve will cut interest rates by 25 basis points at the October 28-29 meeting, and 70% expect another rate cut in December. Data released last Friday showed that inflation in the United States remains sticky. Overall PCE inflation rose by 2.7% year-on-year in August, and core PCE inflation increased by 2.9%, both exceeding the Federal Reserve's 2% target. St. Louis Fed President Alberto Musalem said on Monday that policymakers should "hold up" inflation above the target range. In her view, inflation will not fall back to the 2% target until the end of 2027, so "a restrictive policy stance needs to be maintained". The downside risk to employment has led to differences Officials who are considered more inclined to cut interest rates mainly reason for the increasingly weak signs in the labor market. New York Fed President John Williams said on Monday that the Federal Reserve does not want to cause "undue harm" to its mission of maximizing employment. However, Tom Barkin, the president of the Richmond Fed, believes that as companies have been restricted in recruitment over the past few years, they are unlikely to resort to layoffs, which means that "the downside for the labor market should be limited." Before the meeting at the end of October, the Federal Reserve will obtain the latest inflation and employment data for September, which will be the key basis for decision-making. However, if the US government were to shut down, it might lead to a delay in the release of key economic data, thereby bringing more uncertainty to the decision-making of the Federal Reserve. The market involves risks. Please invest with caution. This article does not constitute personal investment advice and has not taken into account the individual user's specific investment objectives, financial situation or needs. Users should consider whether any opinions, views or conclusions in this article are suitable for their specific circumstances. Any investment made based on this is at your own risk.
2025-09-30 -
View detailsThe chairperson of the US SEC has called for deregulation: replacing quarterly evaluations with semi-annual reports
On Monday local time, Paul Atkins, the chairman of the US SEC, announced in a commentary article for the Financial Times that he would rapidly advance the proposal made by President Trump to ease the frequency of financial report disclosure. Atkins emphasized, "The government should provide the minimum effective dose of regulation needed to protect investors while allowing businesses to thrive." In addition to the financial reporting rules, the SEC under the leadership of Atkins has previously taken a more friendly stance in the cryptocurrency field and halted the defense work of the previously highly anticipated climate risk disclosure rules, demonstrating its systematic regulatory easing approach. As a key step in its regulatory easing agenda, Atkins is rapidly advancing a proposal that would allow listed companies to choose to disclose their financial reports on a semi-annual basis on their own. In addition, Atkins specifically criticized the newly passed "Corporate Sustainability Reporting Directive" (CSRD) and "Corporate Sustainability Due Diligence Directive" (CSDDD) in Europe in the article. He warned: Although Atkins provided sufficient theoretical basis for relaxing the financial report disclosure requirements, this move was not unanimously recognized. According to media reports, investor rights advocacy groups have expressed concerns over this. They are concerned that the reduction in information disclosure will harm retail investors who rely on public information to make decisions and may undermine the efficiency that serves as the cornerstone of the US capital market. This point of contention is expected to become the main focus of debate in the future advancement of the proposal. The market involves risks. Please invest with caution. This article does not constitute personal investment advice and has not taken into account the individual user's specific investment objectives, financial situation or needs. Users should consider whether any opinions, views or conclusions in this article are suitable for their specific circumstances. Any investment made based on this is at your own risk.
2025-09-29 -
View detailsThe draft of the absorption merger for 36.6 billion securities firm stocks has been released!
Three days after announcing the completion of due diligence, on the evening of September 25th, Xiangcai Co., Ltd. released the draft report on the share swap absorption merger with Dazhizhi and the raising of supporting funds and related transactions. Specifically, Xiangcai Co., Ltd. plans to absorb and merge Dazhihui through A share swap. The A-share swap price for Xiangcai Co., Ltd. is 7.51 yuan per share, and that for Dazhihui is 9.53 yuan per share. In the share swap absorption merger, based on the share swap ratio of 1:1.27, Xiangcai Co., Ltd. plans to issue a total of 2.282 billion shares. Today, at the opening of the market, Xiangcai Co., Ltd. once rose by more than 7%. As of the time of publication by Securities China, it was trading at 12.86 yuan per share, with a total market value exceeding 36.6 billion yuan. Dazhizhi once rose by more than 4%. As of the time of publication by Securities China, it was trading at 15.91 yuan per share. The absorption and merger of Xiangcai Co., Ltd. with Dazhizhi is accelerating. The draft discloses in detail that Xiangcai Co., Ltd. plans to absorb and merge with Dazhizhi through a share swap. The A-share swap price of Xiangcai Co., Ltd. is 7.51 yuan per share, and that of Dazhizhi is 9.53 yuan per share. In this share swap and absorption merger, based on the share swap ratio of 1:1.27 (i.e., each share of Dazhihui held by a shareholder of Dazhihui can be exchanged for 1.27 shares of Xiangcai Co., LTD.), the total number of shares that Xiangcai Co., Ltd. plans to issue amounts to 2.282 billion shares. After the share swap is implemented, the total share capital of Xiangcai Co., Ltd. is expected to increase to 5.141 billion shares. Meanwhile, Xiangcai Co., LTD., as the surviving company, plans to raise no more than 8 billion yuan in supporting funds from no more than 35 specific investors simultaneously. Among them, 2.5 billion yuan of the supporting funds will be used for the financial large model and securities digitalization construction project, 1 billion yuan for the big data engineering and service network construction project, and 1.5 billion yuan for the wealth management integration project One billion yuan will be allocated for international fintech projects, and two billion yuan will be used to supplement working capital and repay debts. Before this equity change, Zhang Changhong, the original actual controller of Dazhizhi, and his concert parties Zhang Ting and Zhang Zhihong did not hold any shares of Xiangcai Co., LTD. After this equity change, Zhang Changhong and his concert parties hold a total of 891 million shares of Xiangcai Co., LTD., accounting for 17.32% of the total share capital of the listed company after the share swap and absorption merger. The information disclosure obligor and its concert parties commit that the shares obtained from this equity change will be locked for 12 months and commit not to seek control of Xiangcai Co., LTD. Is AI securities firm on the way? In the A-share market, there are already fintech companies with securities licenses, namely Compass and East Money. The two companies have two subsidiaries, namely Magao Securities and East Money Securities, both of which originated from the previous mergers and acquisitions of Wangxin Securities and Tongxin Securities. After obtaining the securities licenses, the performance of the two companies has increased significantly. It is reported that Xiangcai Co., LTD. 's main business is securities services, and it mainly conducts business through its wholly-owned subsidiary Xiangcai Securities, with complete business qualifications. For over two decades, Dazhizhi has been deeply involved in the fintech industry and has become one of the leading financial information service providers in China, boasting a complete product portfolio within the industry. In terms of international business, the overseas financial information services of Great Wisdom have spread to many countries in East and Southeast Asia. Zhou Lefeng introduced that Xiangcai Securities takes the light-asset strategy as its core foundation, relying on its accumulation of financial technology and the first-mover advantage in wealth management, and focuses on differentiated competition. With a user ecosystem of tens of millions and technological barriers such as AI stock selection and quantitative tools, Dazhizhi has established a leading position in the industry. Risk Warning and Disclaimer
2025-09-26 -
View detailsCatl's market value has surpassed that of Kweichow Moutai, making it the third-largest listed company in China!
Shares of CATL hit a record high on Thursday, with a market value reaching 1.83 trillion yuan, surpassing the 1.8 trillion yuan valuation of Kweichow Moutai and becoming the third-largest domestic listed company in China. Catl's share price rose by as much as 6% at one point and is currently trading at 393.25 yuan. Its cumulative increase this month has reached 30%. Kelvin Lau, an analyst at Daiwa Capital Markets in Hong Kong, said that the outlook for batteries is good, and some investors may be rotating from electric vehicle stocks to battery stocks, benefiting industry leader CATL. Morgan Stanley's on-site research this week shows that CATL is continuously building competitive barriers by relying on its independently developed high-complexity intelligent manufacturing production lines and advanced materials science and technology. The bank maintains an "overweight" rating with a target price of 425 yuan, representing an 8% upside potential compared to the current level. As the world's largest battery manufacturer, CATL holds a dominant position in the rapidly expanding field of energy storage battery systems (ESS), and investors expect this advantage to translate into a key driver for future profit growth. Intelligent manufacturing builds a technological moat Morgan Stanley's on-site investigation found that CATL's manufacturing capacity has reached the leading level in the industry. The company's factory produces 2.2 million battery cells daily, with over 6,800 real-time quality control points set up. It processes 340,000 data transactions per second, creating a highly intelligent production system. This highly complex and intelligent manufacturing line, combined with advanced molecular-level materials science and technology, has built an irreplicable technological barrier for the company, forming a quality premium and cost competitive advantage. Catl currently has a sufficient number of orders and its capacity utilization rate exceeds 90%. The company is building a new production capacity of 250GWh, with the goal of increasing the total capacity to 1TWh by next year to meet the growing market demand. The energy storage business demonstrates a profit advantage In the business of energy storage systems, CATL's products have demonstrated significant economic value. According to a report by Morgan Stanley, the company's products can bring customers an internal rate of return (IRR) premium of approximately 14 percentage points in the global market and a premium of 7 to 8 percentage points in the Chinese market. This profit advantage reflects CATL's leading position in energy storage technology. With the acceleration of the global energy transition, the demand for energy storage is growing rapidly, providing an important support for the company's future performance growth. Morgan Stanley believes that CATL's energy storage business has huge potential, especially against the backdrop of breakthroughs in the European market, the company is expected to further expand its market share. The leading position in the industry has been continuously strengthened Morgan Stanley's report on September 11th pointed out that CATL's industry leadership position has not only not been weakened, but has been further strengthened in the competition. As smaller competitors fall into a profit predicament in the key energy storage sector, CATL's competitive edge becomes even more pronounced. The investment bank believes that the currently popular solid-state battery technology is regarded as short-term speculation, and CATL's technological leading edge will be sustained. In terms of valuation, the company has become significantly attractive among its peers and has become "the cheapest in the industry". Morgan Stanley, based on an EV/EBITDA valuation of 15 times the expected EBITDA in 2026, has set a target price of 425 yuan, believing that CATL's moat remains solid and its long-term investment value is outstanding. Risk Warning and Disclaimer The market involves risks. Please invest with caution. This article does not constitute personal investment advice and has not taken into account the individual user's specific investment objectives, financial situation or needs. Users should consider whether any opinions, views or conclusions in this article are suitable for their specific circumstances. Any investment made based on this is at your own risk.
2025-09-25 -
View details"There's just too much money!" Nvidia has nowhere to invest. Instead of repurchasing, it would be better to choose "let AI close the loop".
Nvidia, which holds a huge amount of cash, is attempting a brand-new way of capital utilization, investing tens of billions of dollars in key customers, partners, and even competitors to create a self-sustaining "AI closed-loop ecosystem", thereby locking in the long-term demand for future chips. The most notable move is that NVIDIA recently announced plans to invest up to 100 billion US dollars in OpenAI to support its large-scale expansion of data centers. This move is not only a strong support for OpenAI, but also reflects the core idea of NVIDIA CEO Jensen Huang - to consolidate the entire AI industry chain with a powerful balance sheet and market confidence. As soon as the news came out, the market immediately responded enthusiastically: Nvidia's market value soared by nearly 160 billion US dollars on the same day. This investment not only alleviated the outside world's concerns about OpenAI's financial situation, but also allowed people to see the so-called "circularity" business model: Nvidia invests money in start-ups, and these companies use the money back to buy NVIDIA's chips. This model is not limited to OpenAI. From cloud service provider CoreWeave to rival Intel and then to Musk's xAI, NVIDIA's investment portfolio has extended to every corner of the AI field. The trouble of having too much money For most companies, having abundant cash is a good thing, but for NVIDIA, this has become a special problem. FactSet data shows that in the past four quarters, Nvidia has generated $72 billion in free cash flow and is expected to approach $100 billion in the current fiscal year. Apart from Apple, no other tech giant can match it. The question is, how to spend it? Mergers and acquisitions are almost impossible. As early as when Nvidia acquired Mellanox in 2020, it encountered regulatory resistance. In the current geopolitical environment, large-scale chip mergers and acquisitions are almost impossible to pass easily. Moreover, Huang Rengxun himself prefers a flat organizational structure and is more inclined towards small-scale technological integration. The repurchase and research and development cannot be digested. Nvidia spent nearly 50 billion US dollars on share buybacks in the past four quarters and added an additional 60 billion US dollars in plans, but still couldn't stop the pace of cash inflows. Although R&D investment has doubled in two years, its proportion of revenue has dropped to 9%, far lower than the previous 22%. Strategic investment: customers, partners, and even rivals Under the constraints of traditional paths, NVIDIA has chosen to use strategic investment to build an AI ecosystem with an internal circulation. The commitment of a $100 billion investment in OpenAI is at the core of it. NewStreet Research analyzed that for every $10 billion Nvidia invests in OpenAI, the latter will spend $35 billion to buy back NVIDIA chips. Although such transactions may lower NVIDIA's per-chip profit margin, they can ensure continuous demand and also provide a "lifeline" for cash-strapped AI companies. Other investment cases include: CoreWeave: Nvidia holds a 7% stake in it. Recently, the two sides signed a $6.3 billion agreement, under which NVIDIA committed to repurchasing its unused cloud capacity and further binding key customers. Intel: NVIDIA unexpectedly invested 5 billion US dollars in its old rival to jointly develop new products, enabling Gpus to integrate more smoothly with Intel cpus and taking the opportunity to expand in the PC market. xAI: Musk's xAI has long listed NVIDIA as a strategic investor. In March this year, NVIDIA, along with partners such as xAI, joined a multi-billion-dollar AI data center and energy construction plan. Win-win chess game: Stabilize demand and lower financing costs This investment strategy is essentially a win-win game for NVIDIA - it not only stabilizes its own demand but also helps its partners reduce financing costs. For NVIDIA, the most direct benefit is to secure a large and stable chip order in the coming years and avoid fluctuations in demand. For a partner like OpenAI, NVIDIA's endorsement is a huge credit guarantee. It should be noted that OpenAI is expected to have accumulated losses of up to 44 billion US dollars by 2029, and it will also have to bear huge expenses such as chip procurement and data center leasing. Before Nvidia's involvement, the interest rate for their financing was as high as 15%, reflecting the market's distrust of their business model. For projects backed by Microsoft, the interest rate is only 6% to 9%. Even Moody's downgraded its outlook from "stable" to "negative" because Oracle is overly dependent on OpenAI. Nvidia's entry has changed everything. With the "almost unbreakable confidence" of the capital market in it, NVIDIA can directly support its AI infrastructure projects with its balance sheet or even additional share issuance, at a cost far lower than external financing. Industry insiders predict that this will significantly reduce OpenAI's credit risk, enabling it to obtain loans at lower interest rates. Risk Warning and Disclaimer The market involves risks. Please invest with caution. This article does not constitute personal investment advice and has not taken into account the individual user's specific investment objectives, financial situation or needs. Users should consider whether any opinions, views or conclusions in this article are suitable for their specific circumstances. Any investment made based on this is at your own risk.
2025-09-24 -
View detailsWhat does it mean that the US stock market and gold have both reached new highs?
Spot gold also soared, reaching a record high of $3,748.84 per ounce at one point. According to the Chui Feng Trading Desk, a research report released by Deutsche Bank on September 22nd holds that although risky assets have shown significant resilience recently, the market is far from reaching a "perfect pricing" state, and the view that "there is almost no further room for the market to rise is wrong." For instance, the record high gold prices, persistent inflation and tariff concerns, the slowdown in the labor market, and expectations of central bank interest rate cuts all reflect that the market has factored in a large number of potential downside risks. Deutsche Bank elaborated on five reasons why the market is far from being "perfectly priced" : The first core argument of the Deutsche Bank report is that the gold price is at a historical high, which is a typical sign of market fear rather than extreme optimism. The report emphasizes that gold, as an asset that does not pay dividends or coupons, usually gains more appeal when investors seek safety. Therefore, historically, high gold prices have often been accompanied by economic turmoil and uncertainty. This stands in sharp contrast to the dot-com bubble period, when the actual gold price hovered at a multi-decade low, reflecting investors' extreme optimism in chasing high-return risky assets. According to the data of the US inflation swap, the interest rate of the 2-year US inflation swap closed at 2.92% last Friday, which means that the market expects inflation to remain above the target of the Federal Reserve in the coming years. Third, concerns over tariffs persist The report mentioned that in addition to the tariffs already implemented, the United States is still reviewing industries such as pharmaceuticals, semiconductors and critical minerals, which brings the possibility of further imposing tariffs. These outstanding risks are negative factors that the market cannot ignore and have already been reflected in the pricing. Four. Concerns emerge in the US labor market: Signs of slowing employment growth and recession At present, the six-month average growth rate of non-farm payrolls in the United States has dropped to 64,000, hitting a new low since the beginning of this economic cycle. The unemployment rate rose to 4.3%, the highest level since the end of 2021. Furthermore, recent benchmark revisions suggest that the employment data for 2024-2025 May be weaker than previously expected. V. Expectations of interest rate cuts by central banks such as the Federal Reserve: Not a sign of a strong economy The Federal Reserve's futures market has even priced in a further interest rate cut of more than 100 basis points by the end of 2026. The research report points out that this expectation of interest rate cuts is not a signal of a strong economy, but rather more reflects investors' concerns that economic growth may slow down, believing that interest rate cuts are necessary to stimulate the economy.
2025-09-23 -
View detailsThe market has seriously underestimated southbound funds. Goldman Sachs: The Hong Kong Stock Exchange is undervalued
On September 18th, the Chasing Wind Trading Desk reported that the Goldman Sachs stock research team released a research report indicating that the share prices of the Hong Kong Stock Exchange have underperformed the broader market in the past month. The main reason is that the management has given a relatively pessimistic guidance on investment returns in the second half of 2025. Goldman Sachs thus raised its earnings per share (EPS) forecast for the Hong Kong Stock Exchange from 2025 to 2027. At the same time, we maintain the "buy" rating on the Hong Kong Stock Exchange, raise the target price by 4% from HK $524 to HK $544, and believe that the current share price is significantly undervalued relative to the level of trading activity. The report indicates that southbound funds are influencing the Hong Kong market in an unprecedented manner. The most crucial driving force behind this is precisely the southbound funds that have been continuously setting new highs. Whether it is the net purchase scale, the average daily trading volume, or the contribution to the total trading volume of Hong Kong stocks, southbound funds have demonstrated strong vitality. More importantly, southbound funds have driven the market value of Hong Kong stocks to achieve a year-on-year growth of approximately 50%, and both the turnover rate of southbound funds and the overall market have reached historical peaks. However, Goldman Sachs emphasized that based on the asset diversification needs of mainland investors, the unique scarcity of the Hong Kong stock market, and the significant valuation discount (higher dividend yields), the inflow and increased participation of southbound funds will be a structural long-term trend rather than a short-term speculative behavior. It is precisely based on confidence in the structural growth of southbound funds and the recent strong trading volume data that Goldman Sachs has comprehensively upgraded its financial model for the Hong Kong Stock Exchange. Earnings per share forecast for 2025: Raised from HK $12.63 to HK $12.97. Earnings per share forecast for 2027: Raised from HK $13.96 to HK $14.45. The report stated that by adopting a three-stage dividend discount model (DDM) and maintaining the forecast P/E ratio for 2026 at 40 times, the target price for the Hong Kong Stock Exchange over the next 12 months was set at HK $544, an increase of 4% from the previous HK $524. Historical valuation comparison: Currently, the share price of the Hong Kong Stock Exchange corresponds to its forward price-earnings ratio, which is slightly lower than the median level of the historical cycle, but its profit growth prospects remain strong. In conclusion, Goldman Sachs believes that the market's pricing of the Hong Kong Stock Exchange's share prices has not fully reflected the structural growth dividends brought by southbound funds. Risk Warning and Disclaimer
2025-09-19 -
View detailsThe United States continues to ease regulations on digital assets, with the SEC significantly lowering the application threshold for
On September 17 local time, the SEC voted to approve the rule change proposals of the three major national stock exchanges, clearing the way for the full opening of the digital asset ETF market. This decision marks a major shift in the regulatory policy for digital assets in the United States and will pave the way for various spot ETFs of cryptocurrencies, ranging from Solana to Dogcoin. The market expects that the first batch of products to benefit will be ETFs tracking Solana and XRP. Asset management companies began submitting applications for these products to the SEC over a year ago, but the regulatory authorities had previously only approved spot ETFs for Bitcoin and Ethereum. The general listing standards have officially come into effect The new rules have established universal listing standards for digital asset and other spot commodity ETFs. Asset management companies and exchanges must meet these standards to obtain approval for new spot crypto ETFs. Teddy Fusaro, president of Bitwise Asset Management, said: The approval efficiency has been significantly enhanced SEC Chair Paul Atkins described the committee members' approval in a press release as a move to promote innovation and reduce barriers to digital asset products. This statement reflects the Trump administration's more friendly regulatory attitude towards digital assets. He expects that the first batch of products could be launched on the market as early as October. The market widely expects that ETFs tracking Solana and XRP will be among the first products approved under the new rules. Asset management companies began submitting these applications to the SEC over a year ago, but the regulatory authorities have so far only approved spot ETFs for Bitcoin and Ethereum. Steve McClurg, CEO of Canary Capital, which has multiple pending products, said: "The door is open, but there is still a lot of work to be done." Feinour pointed out: "Not every token currently meets the requirements, but the SEC's approval will open the floodgates." This indicates that although the regulatory threshold has been lowered, digital assets still need to meet specific standards to obtain approval for ETF products. The market involves risks. Please invest with caution. This article does not constitute personal investment advice and has not taken into account the individual user's specific investment objectives, financial situation or needs. Users should consider whether any opinions, views or conclusions in this article are suitable for their specific circumstances. Any investment made based on this is at your own risk.
2025-09-18 -
View detailsOne picture to understand: Who will own the New OpenAI
On September 17th, according to The technology media The Information, OpenAI is completely changing its equity structure through corporate restructuring, shifting from a non-profit limited return model to a traditional corporate equity system. The restructuring plan still needs to be approved by Microsoft and the attorneys general of two states. Once approved, new investors including Thrive Capital and SoftBank will no longer be constrained by the current return cap structure and will be able to obtain equity returns that match their huge investments. Microsoft acquired the largest stake As OpenAI's most important strategic partner, Microsoft will hold approximately 28% of the shares after the reorganization, making it the largest single external shareholder. However, as previously reported, Microsoft's demands on OpenAI are not merely about equity. Employees and non-profit organizations have gained an important position This arrangement reflects the recognition of the value of talents, especially against the backdrop of fierce competition for key talents in the AI field. Under the current structure, the non-profit organization is entitled to all the remaining profits generated by the profit-making sector after other shareholders have received nearly 275 billion US dollars in profits. The earliest investors in OpenAI's profit-making division, including Khosla Ventures, the University of Michigan, the Reid Hoffman Foundation, Paul Buchheit, the founder of Gmail, and Y Combinator, will jointly acquire a low-digit equity stake. These investors injected a total of 194 million US dollars into the department in 2019. Although the shareholding ratio is relatively small, considering the investment amount and time, this still represents a considerable investment return. Some of the latest OpenAI shareholders will also have significant shares. Earlier this year, OpenAI acquired Io, a mysterious hardware startup founded by former Apple designer Jony Ive, for $5 billion in stocks. Based on a valuation of $500 billion, this means that investors including Thrive Capital, Emerson Collective and SV Angel collectively own OpenAI shares worth $7.75 billion. Risk Warning and Disclaimer
2025-09-17 -
View detailsA major Wall Street bank has modeled Ethereum for the first time: predicting a price of $4,300 by the end of the year
On September 15th, according to the Chuifeng Trading Desk, Citibank released its latest research report, setting a year-end target price of $4,300 for Ethereum (ETH), which is lower than the current spot price. Fundamental value: Citigroup's model shows that the current price of Ethereum has exceeded the level that its network activity can support, possibly driven by the recent inflow of ETF funds and the market's excessive excitement over use cases such as tokenization. There is a risk of overvaluation in the short-term price. Macroeconomic environment: Citigroup pointed out that in the current forecast, the impact of the macroeconomy on Ethereum is minimal. However, once an economic recession occurs, macro factors will become the key force driving the decline of Ethereum. Citibank believes that, unlike Bitcoin's positioning as "digital gold", the value of Ethereum is more closely linked to its network activities (that is, its usage as a smart contract platform). The activities of the Ethereum ecosystem mainly focus on the L2 network. The Citigroup model assumes that the value transmission rate of L2 activities to the Ethereum mainnet is 30%. Even under this assumption, the current price of Ethereum is still higher than the valuation based on the combined activities of L1 and L2. Stronger but smaller ETF capital flows: The leverage effect is significant, but the total amount is hard to match that of Bitcoin The report observed that the large-scale purchases by digital asset Treasury companies and the influx of ETF funds have been the key drivers behind Ethereum's recent outperformance over the broader market. However, Citigroup expects the amount of funds flowing into Ethereum to be smaller than that into Bitcoin. The logic is that the market capitalization ratio of Ethereum to Bitcoin, which is approximately 25%, might be the upper limit for the allocation of new funds in the short term, as new investors are more inclined to start their allocation from the most well-known Bitcoin. The macroeconomic environment, especially the stock market and the US dollar, is a traditional force influencing the prices of cryptocurrencies. However, in Citigroup's benchmark scenario, macro factors are not the decisive force. The report indicates that although Citigroup's US equity team predicts a slight upward potential in the stock market before the end of the year, with the S&P 500 targeting 6,600 points, this is based on Ethereum's historical beta coefficient, which only contributes a weak upward drive of 35 basis points to its price forecast. Citigroup predicts a target price of $4,300 by the end of the year Benchmark scenario ($4300) : Assuming there is a moderate inflow of funds before the end of the year, the market's excitement about Ethereum network use cases is maintained, supporting the price to be slightly lower than the current level. Bear market scenario ($2200) : Mainly dominated by recessionary macro factors, especially the decline in the stock market, which leads to a reversal in market sentiment and a price drop to a level only supported by current network activity. In the short term, there is a risk that prices will be pushed up by market sentiment. In the long term, whether Ethereum can fulfill its promise of being the "world computer" depends crucially on whether it can effectively capture the value of the prosperity of the L2 ecosystem. The market involves risks. Please invest with caution. This article does not constitute personal investment advice and has not taken into account the individual user's specific investment objectives, financial situation or needs. Users should consider whether any opinions, views or conclusions in this article are suitable for their specific circumstances. Any investment made based on this is at your own risk.
2025-09-16