CITI Upgrades Coinbase Shares to Buy Rating Amid Positive Regulatory Shifts

• The timing of this event comes just before the exchange’s expected Q2 results report.
• Coinbase may have difficulties due to the present administration’s enforcement strategy.

With CITI’s “buy” recommendation for Coinbase shares, the prominent cryptocurrency exchange has attracted a lot of interest from investors. The timing of this event, just before the exchange’s expected Q2 results report in early August, has sparked speculation as to why the market is so bullish.

Coinbase’s rating has been upgraded from “Neutral” to “Buy/High Risk” by CITI due to developments in the U.S. political and legal scene. According to the CITI team of experts, these changes may have a beneficial effect on the regulatory risks faced by the business. One positive development for the cryptocurrency business is the Supreme Court’s decision to overrule the Chevron ruling.

Regulatory Shifts

Also, as mentioned in the latest report, the Chevron judgment has the potential to make the SEC’s regulation by enforcement policy more scrutinized by the courts. As a result of this development, crypto defendants may be able to use the Major Questions Doctrine, which might force the SEC to reveal its regulation strategies.

Furthermore, the experts believe that investment and institutional capital might be attracted by a regulatory climate that is more favorable. This situation has the ability to improve cooperation between crypto-native and conventional finance industries, which might be very advantageous to Coinbase.

Notwithstanding the optimistic prognosis, CITI has identified several hazards. Coinbase may have difficulties due to the present administration’s enforcement strategy and the position of the SEC about staking. Although staking is essential to almost a third of on-chain tokens, Ethereum ETF providers cannot provide staking payouts.

With proof-of-stake tokens like ETH being so important for energy-efficient crypto usage, this limitation might affect COIN’s performance.

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