In a report released Tuesday, Citi Research analysts highlighted how the Supreme Court’s overturning of the long-standing Chevron deference could positively impact Coinbase’s regulatory risks. Citi Research analysts believe this ruling provides “additional footing for an improved risk/reward setup” for Coinbase, especially with the possibility of a crypto-friendly administration on the horizon.
Reflecting this optimism, Citi Research upgraded Coinbase’s stock (COIN) from “neutral” to “buy,” setting a price target of $345 per share. Currently, COIN has surged to $259, marking a 65% increase year-to-date, outpacing Bitcoin’s 50% rise over the same period.
This judicial shift comes as a significant development for the crypto industry. The Chevron deference, a 40-year-old legal doctrine, had allowed administrative agencies like the SEC to interpret laws that were ambiguously defined by Congress. With its abolition, federal courts now have more authority to define the scope of these agencies’ powers.
Legal experts have pointed out that the Supreme Court’s decision could also influence how courts interpret the Howey Test, which the SEC uses to determine whether an asset qualifies as an investment contract. Citi Research analysts suggest that the ruling “casts doubt on whether the SEC’s interpretation of the Howey Test remains an infallible construct in their prosecution.” This could open new legal avenues for Coinbase and other crypto defendants to challenge SEC charges.
Furthermore, former President Donald Trump, a Republican candidate in the upcoming election, has criticized SEC Chair Gary Gensler and the Democratic Party’s regulatory stance on cryptocurrencies, claiming they are “very much against it.” Crypto advocates hope a Trump victory could lead to a more favorable regulatory environment for digital assets.
