Banking giant Citi reportedly says that 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 US.
According to a note to clients seen by Seeking Alpha, Citi analyst Peter Christiansen has his radar locked on Coinbase’s stock for 90 days in an upside catalyst watch.
According to Christiansen, there are “good developments brewing” for Coinbase in the Ethereum merge, plus possible regulatory clarity on stablecoins.
The former “could represent hundreds of millions of annual blockchain reward revenue for Coinbase (COIN)” and stimulate Web 3.0 development, says the analyst.
At time of writing, COIN is down 74% from its all-time high but has doubled in price from late June and is now trading at $93.
Citi’s bullish take on Coinbase comes as the exchange faces a new lawsuit from investors who felt misled into buying COIN.
According to the court filing made by Bragar Eagel & Squire, P.C, a law firm that specializes in securities litigation, Coinbase failed to adequately disclose the exchange’s policy on what happens to customers’ crypto assets in the event of a bankruptcy.
“Defendants 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 custodially held crypto assets on behalf of its customers, which assets Coinbase knew or recklessly disregarded 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 disregarded should have been registered as securities with the SEC; (iii) the foregoing conduct subjected the Company to a heightened 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 relevant times.”
The lawsuit was filed on behalf of all persons and entities who purchased or otherwise acquired Coinbase securities between April 14th, 2021 and July 26th, 2022.
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