Coinbase stocks to remain volatile amid ongoing SEC lawsuit: Analyst

Coinbase stocks volatility: Coinbase's stock value is set for potential near-term volatility, influenced by both its ongoing legal battle with the United States Securities and Exchange Commission (SEC) and an anticipated decline in Bitcoin's price, as outlined by Oppenheimer analyst Owen Lau.

In a recent interview, Lau underlined the persistent regulatory uncertainties surrounding Coinbase, currently facing a lawsuit alleging SEC violations. This uncertainty, coupled with an expected dip in Bitcoin's price, which stands at $41,863 as of the latest update, may contribute to fluctuations in Coinbase's stock, currently valued at $125.

Lau pointed to the lack of clear regulations in the United States as a regulatory overhang affecting Coinbase's stock. However, analyst Elliot Stein expressed optimism, predicting a 70 per cent chance of Coinbase receiving a full dismissal in its lawsuit against the SEC.

The anticipated price swings for Coinbase's stock follow a recent 28 per cent decline over the past 30 days. Despite this short-term setback, the stock has experienced an overall gain of approximately 67 per cent in the past three months.

Lau attributed this overall increase to Bitcoin's surge at the end of 2023, driven by optimism surrounding the SEC's approval of a spot Bitcoin exchange-traded fund (ETF) on January 10. However, Bitcoin has seen a 10.37 per cent drop in the past two weeks post-approval.

In addressing Bitcoin's future, Lau expects short-term price fluctuations, stating, "I do think that in the near term, there will be some downward momentum on Bitcoin until the next catalyst."

Notably, on January 23, JPMorgan downgraded Coinbase's stock to an "underweight rating," citing the declining Bitcoin price and the listing of spot Bitcoin ETF shares. The landscape remains dynamic as both legal proceedings and market dynamics continue to influence the trajectory of Coinbase's stock and Bitcoin's value.