Banking Titan Citi Says Ethereum Merger Could Boost Crypto Exchange Coinbase Share Price: Report
Banking giant Citi reportedly says Ethereum’s (ETH) upcoming transition to proof-of-stake expected next month could be bullish for the stock of Coinbase, the largest crypto exchange in the United States.
According to a note to clients seen by Seeking Alpha, Citi analyst Peter Christiansen has his radar locked on Coinbase stock for 90 days in an upside catalyst watch.
According to Christiansen, there are “good developments underway” for Coinbase in the Ethereum merger, plus possible regulatory clarity on stablecoins.
The former “could represent hundreds of millions in annual blockchain reward revenue for Coinbase (COIN)” and spur Web 3.0 development, the analyst says.
At the time of writing, COIN is down 74% from its record high, but has doubled in price 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 filing prepared by Bragar Eagel & Squire, PC, a law firm specializing in securities litigation, Coinbase failed to disclose the exchange’s policies on what happens to customers’ crypto assets in the event of a bankruptcy.
“The defendant made materially false and misleading statements regarding the company’s business, operations and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Coinbase held cryptoassets on behalf of its customers, which assets Coinbase knew or recklessly ignored could qualify as the property of a bankruptcy estate, making 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 or recklessly ignored should have been registered as securities with the SEC; (iii) the foregoing conduct exposed 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 individuals and entities that purchased or otherwise acquired Coinbase securities between April 14, 2021 and July 26, 2022.
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