Citi Upgrades Coinbase to Buy, Citing Optimism Over Regulatory Changes and Political Landscape

Citi, a major investment bank, has upgraded its rating for Coinbase Global Inc. from neutral to buy, reflecting optimism about the future regulatory environment for cryptocurrency assets. This positive outlook is associated with shifts in both the U.S. electoral landscape and recent Supreme Court decisions. Analysts from Citi, led by Peter Christiansen, see the potential for favorable legislation for the cryptocurrency sector, especially following President Joe Biden’s recent decision to withdraw from the presidential race.

Christiansen highlighted that the anticipated changes in U.S. politics may now favor the cryptocurrency industry. The removal of the Chevron Doctrine, which had previously limited regulatory powers, is seen as a significant development that could improve Coinbase’s standing in its ongoing legal battle with the Securities and Exchange Commission (SEC). With a target price increase from $260 to $345, Citi is projecting strong recovery for Coinbase amidst these regulatory shifts.

Coinbase, a key player in the cryptocurrency market with a valuation of $63.26 billion, has seen its shares rise nearly 70% in 2023. This comes after a challenging period for the company during the previous bear market, where it struggled under a $100 stock price. Despite facing legal challenges from the SEC, which accused the exchange of running an unregistered securities operation, Coinbase has actively sought to defend its operations and promote growth within the crypto sector. On Tuesday, the stock saw a decline, closing 2.38% lower at $258.83, as investors continue to monitor the evolving regulatory landscape.