- Coinbase’s stock price may see volatility in the coming months due to an ongoing lawsuit with the SEC over alleged securities law violations and recent declines in Bitcoin’s price.
- While some analysts are optimistic Coinbase will see the SEC lawsuit dismissed, the legal uncertainty combined with Bitcoin’s 10% price drop in the past month point to potential near-term downward pressure on Coinbase’s stock price.
- Despite the potential for near-term volatility, analysts remain positive on Coinbase’s long-term outlook, pending the outcome of the SEC lawsuit.
Coinbase’s stock price may see volatility in the coming months due to regulatory uncertainty and Bitcoin’s declining price, according to an analyst.
Regulatory Uncertainty Around SEC Lawsuit
Coinbase is currently in the midst of a lawsuit with the SEC over allegations that it violated securities laws. The ongoing legal battle creates uncertainty around regulations that could lead to Coinbase’s stock price fluctuating in the near future, according to Oppenheimer analyst Owen Lau.
However, some are optimistic Coinbase will emerge unscathed. Bloomberg analyst Elliot Stein predicts a 70% chance of a full dismissal of the lawsuit.
Recent Price Performance
Coinbase’s stock price has fallen around 28% in the past month but seen a 67% gain in the past three months.
Lau attributes the rise to optimism around a Bitcoin ETF approval, which occurred in January. However, Bitcoin’s price has since dropped 10%, which could negatively impact Coinbase’s stock.
Bitcoin Price Outlook
In addition to the lawsuit, Lau believes Coinbase’s stock will see near-term downward momentum based on Bitcoin’s price.
Bitcoin faces volatility until the next major catalyst or development. JPMorgan downgraded Coinbase for this reason, citing declining Bitcoin prices.
In summary, the unclear regulatory environment and Bitcoin’s falling price point to potential volatility ahead for Coinbase’s stock price in the short term. However, the crypto exchange’s long-term outlook remains positive pending the lawsuit outcome.