Coinbase Stock Faces Potential Fluctuations Amid SEC Lawsuit and Bitcoin Price Dip
Summary:
Analyst Owen Lau predicts potential near-term volatility for Coinbase's stock due to its ongoing lawsuit with the U.S. SEC and the potential decrease in Bitcoin's price. Despite a recent decline, COIN has seen an overall increase of about 67% over the past three months, attributed to Bitcoin's price surge and the U.S. SEC's approval of a spot Bitcoin ETF. Lau also anticipates Bitcoin facing short-term fluctuations. Meanwhile, JPMorgan downgraded Coinbase’s stock to an “underweight rating,” due to Bitcoin's sliding price.
The share price of Coinbase might face instability in the short run owing to its ongoing legal battle with the United States financial supervisor, coupled with a potential drop in Bitcoin's (BTC) value, as per Oppenheimer analyst's prediction. Recently, in a conversation with Yahoo Finance, Owen Lau from Oppenheimer shared insights into the imminent financial unpredictability for Coinbase due to its litigation with the U.S. Securities and Exchange Commission (SEC) over alleged security law breaches. This implies COIN, presently valued at $125, might experience price instability. "Regulations in the United States remain ambiguous and unresolved," Lau adds. However, Elliot Stein, Bloomberg's litigation analyst, expects the lawsuit against Coinbase to be fully dismissed, with a 70% likelihood that the exchange will emerge untouched from the legal troubles.
The expected fluctuations in COIN's price by Lau are based on its recent drop by around 28% over the past month. Nonetheless, it recorded an overall increase of about 67% in the preceding three months. Bitcoin's late-2023 price surge, spurred by the U.S. SEC's positive outlook towards approving a spot Bitcoin ETF (which happened on January 10th), is credited for the overall rise. But, Bitcoin experienced an approximately 10.37% price drop in the last two weeks following the approval of the spot Bitcoin ETF applications. As of now, Bitcoin's price stands at $41,863.
In terms of the Bitcoin price, Lau suggests it may also experience short-term fluctuations. "Bitcoin could face some downward trends until the emergence of the next driver," he stated. On January 23, JPMorgan reduced Coinbase's stock to an "underweight rating," citing the ongoing declining trend of Bitcoin's price and the ETF-listed shares in an investor note.
Published At
1/27/2024 8:30:39 AM
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