Citi Research Upgrades Coinbase to Buy Following Optimistic Supreme Court Ruling on SEC Authority

Citi Research has announced a significant shift in its view on Coinbase, upgrading the stock from “neutral” to “buy” and setting a new price target of $345 per share. This optimistic outlook comes after a recent Supreme Court ruling that could limit the authority of the Securities and Exchange Commission (SEC). Citi analysts believe the favorable regulatory landscape surrounding cryptocurrencies is too substantial to overlook, especially in light of the upcoming U.S. elections where crypto-friendly candidates are gaining traction.

The analysts pointed out that the recent overturning of the Chevron precedent by the Supreme Court provides a stronger argument for the crypto industry against the SEC’s enforcement strategies. Previously binding the SEC with considerable interpretative power over laws, the removal of Chevron deference raises questions about the agency’s regulatory capabilities. Historically, the SEC has used the Howey Test to claim that certain crypto transactions fall under its jurisdiction. Citi’s report indicates that the Supreme Court’s ruling casts doubt on the SEC’s interpretation of this pivotal legal standard.

Moreover, potential changes in leadership could bring about a more favorable crypto regulatory environment. Former President Donald Trump, should he win the upcoming election, has been vocal about his disapproval of the current administration’s approach to crypto, positioning himself as an advocate for the industry. Given these circumstances and ongoing litigation challenging the SEC’s jurisdiction, Citi anticipates that Coinbase and other crypto companies may have more room to maneuver legally, ultimately creating a more stable investment environment for the crypto industry.