Investment bank Citi has increased its share price target for crypto exchange Coinbase, citing a “shifting” political landscape and a recent Supreme Court decision in the United States as bullish catalysts for the stock.
In a July 23 investor note viewed by Cointelegraph, Citi analysts Peter Christiansen, David Wieloszynski, and Nicolette Radomski upgraded their guidance on Coinbase (COIN) from “neutral” at $260 to a “buy” with a target of $345 in the coming months.
The investment bank cited the recent spate of developments in the United States election race as a reason for optimism, saying it was bringing about an “improving regulatory landscape” for crypto assets.
Former president and Republican nominee Donald Trump has made Bitcoin and crypto a key element of his election campaign, vowing to end the Biden administration’s “war on crypto,” ban CBDC, and expand protections for US-based Bitcoin miners.
Despite the growing number of SEC enforcement actions against crypto firms, including Coinbase, Citi analysts said the “balance of power” has now skewed in favor of Coinbase and digital asset firms.
Aside from a potential crypto-friendly administration in the US, Citi analysts also noted the overturning of the Chevron Defence Doctrine as increasing the “risk/reward setup” for owning Coinbase shares.
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On June 28, the Supreme Court voted to overturn the 40-year-old Chevron Defence Doctrine, which Joshua Simmons, a partner at Wiley Rein, told Cointelegraph 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 because of unclear laws. Citi analysts believes could be a boon for Coinbase in its ongoing lawsuit with the regulator.
“We are not legal experts, though the decision does cast doubt whether the SEC’s interpretation of the Howey test, a key basis employed to test whether an asset is to be deemed an invest contract, remains an infallible construct in their prosecution,” wrote the analysts.
Additionally, the investment bank noted the increased user figures of Coinbase’s layer-2 network Base and looked to the launch of spot Ether (ETH) ETFs as an additional stream of income for the crypto exchange moving forward.
“Along with industry/crypto market exposure, we think COIN could benefit additionally from a potential US crypto catchup against relatively higher onchain activity/liquidity that has developed abroad,” the analysts said.
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