- Citi analysts have tipped Coinbase’s COIN for a +30% rally to $345
- They also cited increasing regulatory clarity in crypto as the major catalyst
As a seasoned crypto investor with several years of experience under my belt, I find the recent Citi analyst report on Coinbase (COIN) and its potential rally to $345 quite intriguing. Having closely monitored the regulatory landscape in the crypto space, I can attest to the fact that increasing regulatory clarity has been a long-awaited development for the industry. With U.S election results and the Supreme Court’s decision on the Chevron precedent, the risk surrounding Coinbase seems to be decreasing, opening up new opportunities for institutional and retail capital inflows.
Expert: The analysis team at Citigroup has raised their recommendation for Coinbase’s (COIN) stock from “hold” to “buy.” These analysts predict that COIN could reach a price of $345 based on current market trends, representing a significant increase of approximately 33% from its present value around $260.
As a researcher studying the cryptocurrency market, I believe that the enhancing regulatory environment plays a significant role in shaping the bullish perspective held by Citi analysts, including Peter Christiansen, towards COIN.
The evolving U.S. election context and the recent Supreme Court decision that reversed the established Chevron doctrine have significantly influenced our perspective regarding Coinbase’s regulatory uncertainties.
With the crypto regulatory environment becoming more favorable, Citibank believes there’s a significant potential for greater institutional and retail investment in Coinbase and its COIN stock.
“Opening up the possibility of releasing dormant funds from institutions for investment in cryptocurrencies, leading to greater partnerships between crypto and traditional finance sectors.”
More catalysts for Coinbase
In addition to the potential ease of regulations, analysts highlighted several unique advantages specific to Coinbase that could strengthen the company and its shares in the crypto market.
Coinbase’s Ethereum (ETH) L2 platform, known as Base, has experienced significant growth and attracts the attention of Citi analysts who see it as a valuable source for long-term customer engagement opportunities.
Analysts advise Coinbase to expand its user base in the Base market to seize potential long-term benefits. However, they warn against increasing transaction fees as it may lead to a decrease in active users and reduce future prospects.
As an analyst, I would rephrase it as follows: My analysis centers around user engagement, which is gauged through the number of transactions and active users. Increasing transaction fees without due consideration or failing to decrease them when appropriate could introduce unnecessary friction in the user experience and provide a competitive edge to rivals.
It’s intriguing that the absence of a staking feature in newly launched U.S. Ethereum spot ETFs has been viewed as a beneficial factor. For investors aiming to earn staked yields on ETH, this deficiency has resulted in an increased preference for Coinbase exchange, thereby leading to heightened trading activity.
For individuals looking to earn yields directly from Ethereum (ETH), they will need to acquire these assets through digital asset exchanges like Coinbase, rather than within an Exchange-Traded Fund (ETF). This approach could result in greater trading revenues due to higher transaction volumes compared to the minimal custody fees derived from ETF investments.
Based on Citi’s analysis, retail investors could potentially stake their Ethereum directly into the Ethereum network instead of ineting it through an ETF. Doing so may yield higher returns compared to the fees associated with retail investments in Ethereum ETFs.
Christiansen and his team hold the optimistic view that the primary obstacle and challenge to the bullish perspective on COIN is the persistent implementation of the current administration’s regulatory stance.
At present, COIN has surged by 63% this year up until now, outpacing Bitcoin‘s 48% growth during the same timeframe. Consequently, investors in COIN have enjoyed a 15% additional profit.
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2024-07-25 10:15