Banking giant Citi reportedly says the impending transition from Ethereum (ETH) to proof-of-stake expected next month could be bullish for the shares of Coinbase, the largest crypto exchange in the US.
According to a note to customers seen by Seeking Alpha, Citi analyst Peter Christiansen has locked his radar on Coinbase stock for 90 days in an upward catalyst.
According to Christiansen, there are “good developments brewing” for Coinbase in the Ethereum merger, plus possible regulatory clarity on stablecoins.
The first “could represent hundreds of millions of annual blockchain rewards revenue for Coinbase (COIN)” and drive Web 3.0 development, the analyst says.
At the time of writing, COIN is down 74% from its all-time high, but the price has doubled since late June and is now trading at $93.
Citi’s bullish take on Coinbase comes as the exchange faces another lawsuit from investors who felt misled into buying COIN.
According to the court Submit Created by Bragar Eagel & Squire, PC, a law firm specializing in securities litigation, Coinbase has failed to adequately disclose the exchange’s policy on what happens to clients’ crypto assets in the event of bankruptcy.
“Defendants have made materially false and misleading statements regarding the Company’s business, operations and compliance policies. In particular, Defendants have made false and/or misleading statements and/or failed to disclose that: (i) Coinbase held crypto assets on behalf of its customers, the assets of which Coinbase knew or recklessly disregarded qualify as ownership of a bankrupt estate, leaving those assets potentially subject to bankruptcy proceedings in which Coinbase’s customers would be treated as the company’s general unsecured creditors;
(ii) Coinbase allowed Americans to trade digital assets that Coinbase knew about or had recklessly ignored that should have been registered as securities with the SEC; (iii) the foregoing conduct has subjected the Company to increased risk of regulatory and governmental oversight and enforcement action; and (iv) as a result, the Company’s public statements were materially inaccurate and misleading at all relevant times.”
The lawsuit was filed on behalf of all individuals and entities that purchased or otherwise acquired Coinbase securities between April 14, 2021 and July 26, 2022.
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