Banking giant Citi is reported to be saying that Ethereum’s (ETH) upcoming move to Proof of Stake expected next month could be bullish for the stock of Coinbase, the largest US crypto exchange.
According to a note to clients seen since the Alpha search, Citi analyst Peter Christiansen has locked his radar on Coinbase stock for 90 days on a bullish catalyst watch.
According to Christiansen, there are “good developments” for Coinbase in the Ethereum merger, as well as potential regulatory clarity for stablecoins.
The former “could represent hundreds of millions in annual blockchain reward revenue for Coinbase (COIN)” and spur Web 3.0 growth, the analyst says.
At the time of writing, COIN is down 74% from its all-time high, but has doubled in price since late June and is now trading at $93.
Citi’s bullish stance on Coinbase comes as the exchange faces a new lawsuit from investors who felt misled into buying COIN.
According to the court archiving created by Bragar Eagel & Squire, PC, a law firm specializing in securities cases, Coinbase failed to adequately disclose the exchange’s policy regarding what happens to customers’ crypto assets in the event of bankruptcy.
“Defendants made materially false and misleading statements about the Company’s business, operations and compliance policies. Specifically, the defendants made false and/or misleading statements and/or failed to disclose that: (i) Crypto assets held by Coinbase on behalf of its customers, which Coinbase knew or recklessly ignored could be considered property of a bankrupt; property. those assets that may be subject to bankruptcy proceedings in which Coinbase’s customers will be treated as the Company’s general unsecured creditors;
(ii) Coinbase allowed Americans to trade digital assets that Coinbase knew or recklessly ignored should have been registered as securities with the SEC; (iii) the aforementioned conduct subjected the Company to an increased risk of regulatory and governmental scrutiny and enforcement action; and (iv) as a result, the Company’s public statements were materially false and misleading at all times.”
The lawsuit was filed on behalf of all persons and entities that purchased or otherwise acquired Coinbase securities between April 14, 2021 and July 26, 2022.
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