Bernstein’s $5,500 Ethereum target faces ETF outflow pressure

Ethereum price targets and ETF outflows

Bernstein analyst Gautam Chhugani predicts Ethereum will reach $5,500 by the end of 2026. This target implies a 124.5% gain from the $2,450 price seen on October 16. However, recent volatility shows a difficult recovery path for the asset. On October 16, ETH rebounded toward $2,445 and $2,450 after it dropped to $2,324.97 during the previous 24 hours. This recovery followed $45.46 million in reported short liquidations. US spot Ethereum ETFs experienced $129.5 million in net withdrawals on October 14, which reversed the previous session’s recovery as investors reduced cryptocurrency exposure. The cryptocurrency continues to struggle against a psychological resistance level at $2,500 and $2,600. Chhugani’s forecast stands much higher than the $3,028 target from Citi or the $4,000 projection from Standard Chartered. The convergence of higher interest rates and sudden institutional outflows makes the pursuit of a $5,500 Ethereum target a difficult challenge for bulls in the current market. Will the price sustain a move above $2,600?

Regulatory landscape and the SEC

The regulatory environment in Washington influences these price targets. Bernstein analysts Gautam Chhugani and Mahika Sapra suggest the SEC took a pragmatic approach to avoid a legal battle regarding the approval of spot Ethereum ETFs. This follows President Biden’s veto of the bill to repeal SAB 121, which would have changed accounting standards for crypto custodians. The veto occurred a day after Donald Trump was found guilty in his hush money trial. The analysts believe the SEC was in a corner because Ethereum futures are live on the CME, signifying commodity status. This follows the May 23 approval of 19b-4 forms for eight spot Ethereum ETFs from firms such as BlackRock and Fidelity. In May, the full House and Senate voted to repeal the SEC’s staff accounting bulletin. Donald Trump also hosted an event for buyers of his "Mugshot" NFTs and pledged to support crypto self-custody at the Libertarian Convention on May 25. Regulatory developments linked to the U.S. midterm elections and the anticipation of a pro-crypto SEC further shape the market. Also, the total value locked in tokenized real-world assets is expected to grow from $37 billion to $80 billion in 2026. Stablecoin supply is expected to increase by 56% to $420 billion, driven by fintech and payment companies like Block, Revolut, and PayPal.

Expansion of crypto-native financial services

Trading platforms are expanding into new asset classes to capture revenue. Bernstein raised its price target for Coinbase to $510, implying 48% upside. The firm expects Coinbase to generate $14.1 billion in revenue in 2027, up from $12.7 billion in 2026 and $9.5 billion in 2025. Non-trading revenue, including staking and custody, made up 42% of Coinbase’s total revenue in 2024, up from 14% in 2020. Coinbase also grew its global spot trading market share from 7.2% to 7.8% while maintaining a 140bps retail take rate. Robinhood faces a higher price target of $160 as it expands into prediction markets and its own Robinhood Chain. Robinhood’s prediction market revenue could hit $1.7 billion by 2028 through its Rothera joint venture, which already routes 16% of Robinhood’s event contract volume. The Robinhood Chain launched its mainnet in July 2026 and processed $3.1 billion in decentralized exchange volume in seven days. Robinhood projects 32% revenue growth, 47% EBITDA growth, and 49% EPS growth, with 2028 EPS landing at $4.56.

Macroeconomic pressures and market resilience

Macroeconomic factors create headwinds for these ambitious price predictions. US producer prices rose 6.3% annually in September, which creates uncertainty regarding Federal Reserve interest rate decisions. Higher interest rates increase the appeal of interest-bearing investments and limit demand for speculative assets like Ethereum. Bitcoin remains a major market driver, with Gautam Chhugani forecasting it will reach $150,000 by the end of 2026, with a potential high of $200,000 in 2027. Digital asset Treasury giant Strategy holds 3.6% of all Bitcoin supply, which is worth $53.5 billion in net asset value. During the Iran war, Bitcoin outperformed gold by 25%. Bitcoin recently traded at $86,772.72, after hitting a high of $89,956.88 and surging past $120,000 last summer. Bitcoin also fell 19% earlier in 2026 and traded below $68,000 recently. You should watch the $2,500 level to see if buyers regain momentum. Lee Munson of Portfolio Wealth Advisors stated that the idea of a market insulated from broader downturns is laughable.