Republican Sweep in U.S. Election Would be the Most Bullish Outcome for Coinbase and the Crypto Market: Citi

• A potential Republican sweep of both chambers of Congress would be the most bullish result for Coinbase and crypto markets, the report said.
• Citi said a Harris win and a divided Congress would lead to more uncertainty for the digital assets space.
• The bank cut its Coinbase price target to $275 from $345, while maintaining its buy rating on the stock.

A Republican sweep in the upcoming U.S. election would be the most bullish result for both Coinbase (COIN) and the wider crypto market, while a Harris victory and a divided Congress would likely lead to more uncertainty for the digital assets sector, Citi (C) said in a research report on Wednesday.

"The Trump/Vance ticket has publicly endorsed digital asset reform, Republican control of the Senate would be important for passing bills like FIT21 and confirming pro-crypto agency leaders," analysts led by Peter Christiansen wrote, adding that "the pace of digital asset reform would likely move faster with both chambers of Congress aligned."

Still, a GOP victory in the Senate and a Democrat win in the House would still be a bullish outcome for Coinbase and crypto markets, the report said. The U.S. election will be held on Nov. 5 and results will be declared on Nov. 8.

Citi noted that the existing House Financial Services Sub Committee is manned by several Democrats who are strongly against crypto. However, they would "likely still be outweighed by a combined Democrat and Republican pro-crypto contingent."

A Harris victory and a Republican Congress would be an uncertain outcome for crypto markets, as she is yet to detail her crypto policy goals, the bank said, and a Democrat administration would likely keep many of the current agency heads to avoid potential challenges with Senate confirmation.

Citi said the result that would lead to the most uncertainty for digital assets would be a Harris win and a divided Congress. It would pose possible Senate confirmation challenges and Coinbase investors would likely be less hopeful that any potential crypto legislation would gain enough support from the Senate.

Citi has a buy rating on Coinbase shares. It cut its price target to $275 from $345. The stock was 2.7% higher at $209.65 in early trading Friday.

Read more: Editorial: We Applaud Trump's Crypto Efforts Though His Record, Rhetoric Raise Red Flag