Coinbase stock faces near-term volatility amid regulatory overhang — Analyst

Oppenheimer analyst Owen Lau warns of potential price fluctuations for Coinbase’s stock in the coming months, citing its ongoing SEC lawsuit and the overall crypto industry health.
Oppenheimer analyst Owen Lau warns of potential price fluctuations for Coinbase’s stock in the coming months, citing its ongoing SEC lawsuit and the overall crypto industry health.

Coinbase’s stock price may experience near-term volatility due to its ongoing lawsuit with the United States securities regulator, as well as an anticipated decline in the price of Bitcoin (BTC), according to an analyst for investment bank Oppenheimer.

In a recent interview with Yahoo Finance, Oppenheimer analyst Owen Lau outlined that the ongoing legal uncertainty for Coinbase, in relation to its lawsuit with the U.S. Securities and Exchange Commission (SEC) alleging it violated security laws, potentially means that its stock, currently priced at $125, is in for some price fluctuations in the near future.

“There is still a regulatory overhang, we still don’t have a clear regulations in the United States right now.”

However, Bloomberg litigation analyst Elliot Stein recently revealed his optimism that Coinbase will receive a full dismissal of its lawsuit against the U.S. regulator, predicting a 70% chance that the exchange will come out of the legal proceedings unscathed.

Lau’s anticipated price swings for Coinbase stock were in response to its recent decline of approximately 28% in the last 30 days. However, it has seen an overall gain of around 67% in the past three months.

Lau attributes the overall increase to Bitcoin’s price surge toward the end of 2023 due to the growing optimism of the U.S. SEC approving a spot Bitcoin ETF, which occurred on Jan. 10.

However, Bitcoin’s price has dropped approximately 10.37% over the past two weeks following the SEC’s approval of spot Bitcoin exchange-traded funds. At the time of publication, Bitcoin’s price is $41,863.

Oppenheimer analyst Owen Lau on Yahoo Finance. Source: Yahoo Finance

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As for Bitcoin’s price, Lau similarly anticipates it will face short-term price fluctuations.

“I do think that in the near term there will be some downward momentum on Bitcoin until the next catalyst,” he stated.

On Jan. 23, Cointelegraph reported that JPMorgan also downgraded Coinbase’s stock to an “underweight rating,” citing the falling price of Bitcoin and listing shares of spot Bitcoin ETFs.

Magazine: Coinbase fights SEC in court, SBF’s parents seek lawsuit dismissal, and Bitcoin ETFs: Hodler’s Digest, Jan. 14-20