Coinbase Set to Thrive with Evolving U.S. Regulatory Landscape

Coinbase Positioned for Growth Amid Regulatory Changes

Crypto exchange Coinbase (COIN) is poised to experience significant benefits from an evolving regulatory landscape in the United States, particularly following the presidential election in November and the recent Supreme Court ruling that overturned the Chevron precedent. This optimistic outlook was highlighted in a research report released by Citi (C) on Tuesday, which upgraded Coinbase’s stock rating from neutral to buy.

Citi has raised its price target for Coinbase shares from $260 to $345, reflecting a bullish sentiment. At the time of publication, the stock was trading around $266, showing little change in premarket activity. The bank’s analysts articulate that Coinbase’s stock could react favorably to a more favorable regulatory environment stemming from the upcoming U.S. election, along with heightened confidence in the company’s legal strategy following the significant overturn of the Chevron Deference Doctrine.

“Despite the potential turbulence associated with the forthcoming U.S. elections, we believe that the risk/reward setup for Coinbase—especially concerning its defense against the Securities and Exchange Commission’s (SEC) lawsuit—has markedly improved in recent weeks,” stated analysts led by Peter Christiansen.

Additionally, the anticipated launch of spot ether (ETH) exchange-traded funds (ETFs) in the U.S. later today is expected to serve as a positive catalyst for the crypto exchange. The introduction of these ETFs not only indicates the possibility of more crypto funds entering the market but also suggests an increase in the overall adoption of cryptocurrencies. This development presents a promising opportunity for greater custody revenue for Coinbase, as outlined in the report.

While Coinbase’s stock has already surged by 52% year-to-date, Citi emphasizes that the potential upside from a more accommodating regulatory environment could be substantial. This shift could potentially unlock previously sidelined institutional capital, foster increased investment, and enhance collaboration between crypto-native firms and traditional financial institutions.

Furthermore, Coinbase stands to gain from a “U.S. crypto catchup,” reflecting the heightened on-chain activity and liquidity that has emerged in international markets. This positions the exchange favorably as it navigates the evolving landscape of cryptocurrency regulation and adoption.