In a research report released on Tuesday, Citigroup stated that with the improvement of the regulatory environment in the United States after the November presidential election and the Supreme Court's ruling on June 27 overturning the 40 year old legal precedent of the "Chevron first principle," cryptocurrency exchange Coinbase (COIN) may benefit from the improved regulatory environment. Therefore, Citigroup has upgraded Coinbase's rating from neutral to buy and raised its target stock price from $260 to $345. At the time of writing, COIN's pre-market trading price was around $262.

The Chevron compliance principle is an important legal principle in US administrative law, which requires courts to give authoritative recognition to administrative agencies when their interpretation of jurisdictional regulations is reasonable. Simply put, when the law is ambiguous or unclear, the court usually supports the interpretation of the administrative agency.

Overall, the overturning of Chevron's compliance principle may be seen as a positive development for the cryptocurrency market, as it could lead to a fairer and more transparent regulatory environment, potentially bringing more freedom and security to business operations for companies like Coinbase.

The Citigroup analyst team led by Peter Christiansen stated:

Despite the upcoming US election bringing more turbulence, we believe that Coinbase's risk and return in responding to lawsuits from the US Securities and Exchange Commission (SEC) have significantly improved

In addition, the Ethereum spot ETF launched tonight in the United States is another positive for Coinbase exchange. The report points out that the launch of these ETFs heralds the possibility of more cryptocurrency ETFs entering the market in the future and bringing in more custody revenue for Coinbase exchange.

Although the stock has risen 52% since the beginning of the year, Citigroup pointed out that due to a more relaxed regulatory environment, potential upside opportunities may be greater, and there is a chance to unlock previously shelved institutional capital and investments, and enhance cooperation between cryptocurrency native exchanges and traditional finance.