Experts are pessimistic about Coinbase stock as the exchange grapples with regulations and competitive challenges.
Besides the cryptocurrency market rally, Coinbase stock, COIN, is also up more than 80% in 2023. While the stock is trading at $57, as of this writing, it has a long journey to recover from the damage caused by the bear market.
STRUGGLE IN COIN STOCKS
COIN reached an all-time high of $429 in April 2021 and has since seen a significant decline of over 85%.
Coinbase stock is facing resistance at the $85 price range on the weekly time frame. It needs to close weekly above $85, with strong volume, to continue its 2023 bullish trend.
Also, COIN stock needs to maintain its support around $50. Otherwise, it could signal a bullish trend reversal for 2023.
will transferion Coinbase Offshore Hurt?
The lack of clear regulations in the US frustrated Coinbase CEO Brian Armstrong. At London FinTech Week, he said, “Everything is on the table, including relocation or whatever is necessary.”
In fact, the exchange was able to obtain a license to operate in Bermuda. But according to Wall Street Journalsome analysts doubt the stock market will move abroad.
Dan Dolev, senior analyst at Mizuho Securities, told WSJ:
“It won’t help them if the US market isn’t what it used to be in 2021. There are a lot of international players out there. Coinbase only has an advantage in the US because it’s so dominant.”
About 84% of Coinbase’s total revenue came from the US markets in 2022.
Do battle with the SEC
Coinbase was served with Wells a notice by the Securities and Exchange Commission (SEC) threatening enforcement action in late March. In response, the exchange responded by suing the Securities and Exchange Commission.
It hopes to force the federal regulator to clarify positions on cryptocurrency and whether existing securities rules and procedures can be applied to the crypto industry.
Given the Coinbase-related legal turmoil, experts are pessimistic about the COIN stock. Jason Kupferberg, research analyst at Bank of America, says:
Wells’ notice is the latest data point to show that there are some fairly significant regulatory headwinds and uncertainties that are likely to remain a drag on the company and the stock.
Motley Fool Explain The COIN stock represents the broader crypto market. “Investors who are optimistic about the future of cryptocurrency can buy Coinbase as a bet on the growth of the entire industry. In doing so, they will not have to choose individual coins for their portfolios.”
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