Coinbase (COIN) will remain weighed down by high levels of uncertainty until crypto regulations are better established in the U.S., Wall Street giant Citi (C) said in a research report on Monday.
The bank cut its rating on the exchange's stock from buy to neutral and cut its price target to $65 from $80. Coinbase shares dropped 1.2% to $49.54 in premarket trading.
“Coinbase’s notions of redomiciling outside of the U.S., the company’s public responses and now a formal suit against the [Securities and Exchange Commission] are indicative that the [Wells Notice's] process has not (yet?) been productive,” analysts led by Peter Chistiansen wrote.
“The failure of Signature Bank and whether it was crypto related along with other events of the past year are all fodder for the SEC,” the analysts wrote.
Citi says that Coinbase remains a category leader and “one of the better positioned platforms should broader integration with traditional finance occur,” but the exchange is now being “tasked to advocate for a reputationally damaged industry and pave a sustainable pathway towards regulatory compliance.”
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