Compass Point initiated coverage of crypto exchange Bullish with a neutral rating and a $45 price target — roughly 16% below the stock’s current level — flagging regulatory and valuation risks that could limit the firm’s U.S. ambitions.
The analysts, Ed Engel and Abdullah Dilawar, pointed to the stalled CLARITY Act, which would clarify the Securities and Exchange Commission and CFTC jurisdictions, and to New York’s restrictive BitLicense as major hurdles. They said the New York Department of Financial Services often treats blockchain innovations cautiously and may be reluctant to approve an exchange that acts as its own market maker, despite Bullish’s transparent AMM liquidity and algorithm.
BLSH shares closed down 12% on Wednesday, trading just above $54. The Peter Thiel-backed exchange debuted on the NYSE last month after an IPO priced at $37, briefly topping $118. Compass Point highlighted that the stock currently trades at about 110× core operating profit and sits roughly 68% above its IPO level — metrics that suggest elevated expectations.
The analysts added that if Bullish secures U.S. licensing, it could become a serious competitor to Coinbase by leveraging lower institutional fees. For now, Bullish focuses on traders in Europe and Hong Kong. Compass Point suggested there may be a better entry point within 1–2 quarters.
Investor takeaway: Bullish’s rapid post-IPO rally reflects strong market enthusiasm, but regulatory uncertainty and stretched valuation present material risks. Investors should weigh the possibility of delayed U.S. market access and high multiples before allocating capital.
Source: Decrypt. Read the original coverage for full details.