Published -July 5th, 2023 @ 04:40 PM (GMT+2)
Analyst Downgrades amid Regulatory Chaos
Coinbase (NASDAQ:COIN), the prominent U.S. cryptocurrency exchange, has experienced a downgrade in rating by Piper Sandler analyst, Patrick Moley. Moley cites ongoing legal disputes with the Securities and Exchange Commission (SEC) and pervasive ambiguity regarding U.S. cryptocurrency regulation as reasons for this shift. The tumultuous regulatory landscape has clouded the visibility of Coinbase's future revenue, resulting in a change in Moley’s rating from 'overweight' to 'neutral.'
Trading Volumes Expected to Hit Two-year Low
Despite the surge in crypto prices, Coinbase has not seen a corresponding increase in trading volumes in recent times. This sluggish trading performance, combined with the uncertainty of a spot Bitcoin ETF approval, further enhances the uncertainty, leading to the anticipation of the company's quarterly trading volumes and monthly transacting user totals to be at their lowest in over two years.
Persistent Faith in Coinbase Despite Regulatory Hurdles
Notwithstanding these challenges, Moley recognizes Coinbase's potential as a significant player in the crypto industry, provided that regulatory clarity is reached. Moreover, the influence of the SEC's lawsuit has not hindered traditional financial institutions from aligning with Coinbase. Notable institutions such as BlackRock, Fidelity, and ARK Investments have opted for Coinbase as their surveillance-sharing partner for spot-Bitcoin exchange-traded fund (ETF) filings.
Market Analysts' Mixed Views on Coinbase
In the light of the current situation, market analysts have divergent opinions about Coinbase. As per Bloomberg, 11 analysts recommend buying Coinbase stock, 13 suggest holding, while eight advise selling.
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