TLDR
- Compass Point rates Bullish crypto exchange neutral with $45 price target, down 16% from current levels
- Stock trades at 110x projected 2026 earnings, analysts call it overvalued
- US market entry blocked until CLARITY Act passes, possibly delayed until 2026
- Exchange could compete with Coinbase through lower fees if regulatory approval comes
- Shares fell 12% Wednesday after debuting at $37 and hitting $118 peak
Investment bank Compass Point initiated coverage of Bullish crypto exchange with a neutral rating Tuesday. The firm set a $45 price target for the Peter Thiel-backed company, representing 16% downside from current levels.
Analysts Ed Engel and Abdullah Dilawar raised concerns about the stock’s valuation metrics. The exchange trades at 110 times its projected 2026 core operating profit, a multiple they consider excessive.
Bullish went public on the New York Stock Exchange last month at $37 per share. The stock immediately surged, reaching highs above $118 before settling back to current levels around $54-59.
The Cayman Islands-based exchange received $1.15 billion in IPO proceeds, mostly held in stablecoins. The company focuses on institutional crypto trading in Europe and Hong Kong markets.
Regulatory Roadblocks Prevent US Expansion
The analysts believe Bullish cannot enter American markets until regulatory clarity emerges. Congress must pass the CLARITY Act to define SEC and CFTC jurisdiction over crypto assets.
This legislation may not arrive until the first half of 2026. The delay keeps Bullish locked out of the world’s largest crypto trading market.
New York’s BitLicense requirements create additional barriers for the exchange. The state’s Department of Financial Services maintains strict approval standards for crypto businesses.
Bullish operates as its own market maker through automated systems. This dual role could trigger conflict-of-interest concerns with New York regulators who scrutinize such arrangements.
The exchange currently avoids retail customers, targeting institutional investors instead. This strategy mirrors Coinbase’s focus on high-volume professional traders.
Coinbase Competition Depends on US Entry
If Bullish gains American approval, it could challenge Coinbase’s market dominance. The analysts highlighted the exchange’s competitive fee structure as a key advantage.
Coinbase charges higher rates than international competitors with limited domestic competition. Bullish’s lower fees could attract institutional clients seeking cost savings.
The company maintains a $2.7 billion crypto treasury, primarily bitcoin holdings. This exposure creates direct correlation between stock performance and bitcoin price movements.
Engel’s price target assumes bitcoin reaches $160,000 and assigns 50% probability to US market entry. American expansion alone could add $12 per share value to the stock.
The analysts recommend waiting for better entry points within two quarters. Current valuations make immediate investment less attractive despite long-term potential.
Bullish shares closed down 4.6% Wednesday at $59.20 following the analyst coverage. The stock remains 68% above its initial public offering price despite recent declines.
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