The worth of Coinbase shares might see some changes soon. This could be due to a legal fight with a US financial watchdog and a predicted fall in Bitcoin’s value, says a financial expert from Oppenheimer.
Recently, Owen Lau from Oppenheimer discussed legal concerns about Coinbase on Yahoo Finance. He highlighted a present lawsuit with the U.S. Securities and Exchange Commission (SEC). Because of this, the existing $125 share of Coinbase could see changes. It indicates that Coinbase may have breached certain financial regulations, which can eventually affect its steady stock value.
“We continue to face regulatory uncertainty, as clear regulations are still lacking in the current landscape of the United States.”
Recently, Elliot Stein, a litigation analyst at Bloomberg, indicated that he expects a gross dismissal of Coinbase’s lawsuit against the US regulator. He forecasts a high likelihood, about 70%, that the exchange might prevail in these legal matters unharmed.
Why did Lau predict fluctuations in Coinbase’s stock price? The reason is the recent drop of nearly 28% within a month. But there’s also been an upside—an impressive overall increase of approximately 67% during the past quarter.
Coinbase Takes A Hit: JPMorgan Downgrades Amid Bitcoin Price Fluctuations
So why this general growth? Lau gives credit to the price leap of Bitcoin at 2023’s end. And that was primarily due to increased positive sentiment on US SEC’s approval of a spot Bitcoin ETF – a decision arrived on Jan. 10.
Yet, Bitcoin’s value dipped around 10.37% in the last two weeks. This happened after the SEC approved spot Bitcoin exchange-traded funds. Currently, Bitcoin’s price is $41,863.
Concerning the value of Bitcoin, Lau also foresees the likelihood of short-term fluctuations in its price.
“I believe that, in the foreseeable future, Bitcoin will likely experience a downward trend until the emergence of the next significant catalyst,” he asserted.
As of Jan. 23, JPMorgan downgraded Coinbase’s stock to an “underweight rating,” attributing the decline in Bitcoin’s price and the listing of shares in spot Bitcoin ETFs as reasons for the downgrade.
Related Reading | SEC Commissioner Hints At Smooth Approval For Ethereum ETFs
The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.
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