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| Citi Boosts Coinbase Target Price While Staying Cautious on Regulatory Risks |
Citi has bumped up its target price for Coinbase (NASDAQ:COIN) shares to $151 from $90 each, as revealed in a note on Friday. They're sticking with a Neutral rating for the stock.
In the note, the analysts dove into Coinbase's defense against the SEC lawsuit. They pointed out that the legal tussle has kicked off with arguments in front of the SDNY to try and get the case dismissed.
The analysts believe that due to the significance of the case, it's not something that can be easily resolved through initial legal motions alone. They anticipate that it might drag on for over a year, particularly when entering the summary judgment phase.
Reflecting on the Ripple vs. SEC case, which they see as a positive development for the industry, the analysts noted two important things. First, XRP doesn't fall into the categories of PoW or PoS. Second, Ripple's attempts to tweak the Howey Test, a crucial factor in determining regulatory authority for terms like "staking" and "altcoin," didn't succeed.
Despite these considerations, Citi is maintaining a Neutral stance on COIN primarily due to regulatory risk. They're highlighting that any potential legal decision could significantly impact Coinbase's future business model.