According to investment bank analyst Oppenheimer, Coinbase's share price may experience short-term volatility due to an ongoing lawsuit with the US financial regulator, as well as a potential decline in the price of Bitcoin (BTC).
In a recent interview with Yahoo Finance, Oppenheimer analyst Owen Lau noted that the ongoing legal uncertainty for Coinbase due to its lawsuit against the US Securities and Exchange Commission (SEC) alleging that it violated security laws could mean COIN, which is priced at is currently $125, with some price fluctuations potentially expected in the near future.
“The regulatory overhang is still there; we still don't have clear rules in the United States.”
However, Bloomberg litigation analyst Elliot Stein recently expressed his optimism that Coinbase will receive a blanket dismissal of its lawsuit against the US regulator, predicting a 70% chance that the exchange will emerge from the trial unscathed.
Lau's expected fluctuations in COIN prices were in response to their recent decline of about 28% over the past 30 days. However, over the past three months, the overall increase has been approximately 67%.
Lau attributes the overall increase to rising Bitcoin prices towards the end of 2023 due to growing optimism from the US Securities and Exchange Commission (SEC) regarding the approval of a spot Bitcoin ETF, which occurred on January 10.
However, the price of Bitcoin has fallen by about 10.37% over the past two weeks after spot bids for a Bitcoin ETF were approved. At the time of publication, the price of Bitcoin is $41,863.
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As for the Bitcoin price, Lau also expects it to face short-term price fluctuations.
“I do think Bitcoin will have some downward momentum in the near future until the next catalyst,” he said.
On January 23, it was reported that JPMorgan also downgraded Coinbase shares to an “underweight rating,” citing the fall in the price of Bitcoin and listing the shares as a spot Bitcoin ETF in a note to its investors.