Investment bank Citi has raised its share price target for crypto exchange Coinbase. They believe changes in US politics and a recent Supreme Court decision will boost the stock. Citi analysts Peter Christiansen, David Wieloszynski, and Nicolette Radomski upgraded Coinbase (COIN) from “neutral” at $260 to a “buy” with a target of $345 in the coming months.
The investment bank is optimistic due to recent developments in the US election race, which they believe are leading to a better regulatory environment for crypto assets. Former president and Republican nominee Donald Trump has made Bitcoin and crypto a key part of his campaign, promising to end the Biden administration’s “war on crypto,” ban CBDC, and increase protections for US-based Bitcoin miners.
Despite the increasing number of SEC actions against crypto firms, including Coinbase, Citi analysts believe the “balance of power” has now shifted in favor of Coinbase and digital asset companies. Besides the possibility of a crypto-friendly administration in the US, Citi analysts mentioned that overturning the Chevron Defence Doctrine has improved the “risk/reward setup” for owning Coinbase shares.
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Potential US Crypto-Friendly Administration Boosts Optimism
On June 28, the Supreme Court overturned the 40-year-old Chevron Defence Doctrine. Joshua Simmons, a partner at Wiley Rein, told Cointelegraph this was a “game changer” for crypto regulation in the United States. With Chevron overruled, courts must use their own judgment when interpreting statutes and can no longer defer to an agency’s interpretation due to unclear laws. Citi analysts believe this could benefit Coinbase in its ongoing lawsuit with the regulator.
“We are not legal experts, though the decision does cast doubt on whether the SEC’s interpretation of the Howey test, a key basis for determining if an asset is an investment contract, remains infallible in their prosecution,” wrote the analysts.
Additionally, the investment bank noted the increased user numbers of Coinbase’s layer-2 network Base and looked forward to the launch of spot Ether (ETH) ETFs as an additional income stream for the crypto exchange.
“Along with industry and crypto market exposure, we think COIN could benefit from a potential US crypto catch-up against the relatively higher on-chain activity and liquidity that has developed abroad,” the analysts said.
