• Citi has downgraded Coinbase’s stock rating from buy to neutral, and lowered its price target to $65 from $80.
• Citi stated that Coinbase will remain weighed down by high levels of regulatory uncertainty until crypto regulations are better established in the US.
• Coinbase has filed a lawsuit against the SEC seeking clarity on regulations.
Citi Downgrades Coinbase Stock Rating
Citi (C) has downgraded its rating for Crypto exchange Coinbase (COIN) from ‘buy’ to ‘neutral’ and reduced its price target to $65 from $80. The bank cited uncertainty around cryptocurrency regulations in the United States as a major factor impacting the company’s stock performance.
Coinbase Takes Legal Action Against SEC
Coinbase further took legal action against the Securities and Exchange Commission (SEC) for lack of clarity on regulations, with Paul Grewal, chief legal officer at Coinbase, saying that if needed, they are prepared to put resources into a court battle for clarity.
Signature Bank & Other Factors Affecting Regulatory Clarity
Analysts also noted that events such as failure of Signature Bank and other factors have been used by the SEC to further hinder regulatory clarity. They added that while Coinbase remains a category leader with potential to grow further in traditional finance, it is now tasked with advocating for an industry facing reputation damage while paving a pathway towards compliance.
Adam Draper Believes Investment Will Pay off
Adam Draper, founder of venture capital firm Boost VC said recently that he believed investing in cryptocurrency would be ‘the best investment’ over the next five years. He added that this was due to cryptocurrencies being “a new asset class” which is not correlated with stocks or other traditional investments.
El Salvador Grants First Digital Asset License
In other news, El Salvador granted its first digital asset license to Bitfinex last week after becoming one of the few countries in Latin America planning to adopt Bitcoin as legal tender along with USD. The license will provide users access to buying and selling digital assets under regulated conditions .