According to Cointelegraph: As Coinbase wrestles with an ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) and anticipates a downward trend in Bitcoin's price, the company's stock is likely to experience short-term volatility, according to Oppenheimer analyst Owen Lau.
Coinbase faces a lawsuit from the SEC alleging violation of security laws, instilling uncertainty in its stock's future performance, which currently stands at $125. While the regulatory landscape continues to be hazy, Lau believes upcoming fluctuations in Coinbase's stock are likely.
However, optimism from some quarters, such as Bloomberg litigation analyst Elliot Stein, suggests a potential positive outcome for Coinbase. Stein predicts a 70% chance for a full dismissal of the lawsuit against Coinbase, which could be a positive influence on the company's stock.
The anticipated price turbulence comes after a recent 28% dip in Coinbase's stock value over the last 30 days, despite a substantial overall gain of around 67% in the last three months. Lau links this upward trajectory to Bitcoin's late-2023 price rally, fueled by rising hopes of the U.S. SEC approving a spot Bitcoin ETF, a milestone eventually achieved on Jan 10.
Bitcoin's value, however, has slipped around 10.37% in the following two weeks after the SEC's approval of spot Bitcoin exchange-traded funds. Lau warns of likely short-term price fluctuations for Bitcoin, expecting "downward momentum on Bitcoin until the next catalyst."
This prediction aligns with a recent downgrade of Coinbase's stock to an "underweight rating" by JPMorgan, pointing to factors like the dwindling price of Bitcoin and the listing of spot Bitcoin ETFs.