Citi Group Upgrades Coinbase to ‘Buy’ Amid Optimistic Political Climate and Revenue Growth

Investment bank Citi Group has decided to upgrade its outlook on Coinbase shares to a “buy,” citing a potential shift in U.S. politics and an increase in the company’s revenues as positive signs for investors. In a recent investor note, analysts mentioned growing optimism surrounding the crypto landscape due to developments in the U.S. election race, particularly the push by some candidates to create a more favorable environment for digital assets. They raised the target price for Coinbase from $260 to $345, highlighting these changes as bullish factors.

The analysts pointed out that former President Donald Trump has made cryptocurrency a central aspect of his campaign, promising to take measures against policies perceived as unfavorable to the crypto sector. They believe that the changing political environment could lead to improved regulations for cryptocurrency firms like Coinbase. Despite ongoing enforcement actions from the U.S. Securities and Exchange Commission (SEC), Citi analysts suggested that the current balance of power is increasingly favorable for Coinbase and its peers in the digital asset space.

Furthermore, a significant legal development occurred with the recent overturning of the Chevron Defense Doctrine by the Supreme Court. This change allows courts to use their own judgment in interpreting laws without deferring to agency interpretations on unclear statutes. Analysts from Citi suggested that this ruling could positively impact Coinbase’s ongoing lawsuit against the SEC. They highlighted the ruling as a potential game changer for crypto regulation. Apart from these political and legal updates, Citi noted that Coinbase is seeing increased user engagement through its layer-2 network, Base, and may benefit from new revenue streams such as the potential launch of spot Ether exchange-traded funds.