Crypto News- Coinbase’s stock is bracing for potential short-term turbulence, fueled by the ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) and the anticipated downward trend in Bitcoin’s price, currently hovering at $41,801, as highlighted by Oppenheimer analyst Owen Lau in a recent discussion with Yahoo Finance.
Coinbase Stock Faces Short-Term Volatility on Regulatory Front, Analysts Warn
Lau emphasized the lingering regulatory uncertainties surrounding Coinbase, particularly its SEC lawsuit alleging violations of security laws. At its current valuation of $125, the stock may experience fluctuations in the coming weeks. Lau pointed out, “There is still a regulatory overhang; we still don’t have clear regulations in the United States right now.”
Contrary to this caution, Bloomberg litigation analyst Elliot Stein expressed optimism about Coinbase’s legal outlook, foreseeing a 70% chance of a full dismissal of the lawsuit. Despite Lau’s projections, Coinbase has witnessed a recent 28% dip in the last month, but overall, it boasts a 67% gain in the past three months.
Coinbase Faces Stock Price Volatility Amidst Legal Battles and Bitcoin’s Shifting Fortunes: Analyst Insights
Lau attributed this surge to Bitcoin’s rally in late 2023, driven by optimism around the potential approval of a spot Bitcoin ETF by the U.S. SEC, a milestone achieved on Jan. 10. However, following the SEC’s approval of spot Bitcoin exchange-traded funds, Bitcoin’s price has declined by approximately 10.37% in the last two weeks, currently standing at $41,863.
Anticipating short-term volatility for Bitcoin as well, Lau commented, “I do think that in the near term there will be some downward momentum on Bitcoin until the next catalyst.”
Adding to the concerns, JPMorgan recently downgraded Coinbase’s stock to an “underweight rating” on Jan. 23, citing the declining price of Bitcoin and the listing of spot Bitcoin ETF shares.