![]() ![]() Namely, because the SEC’s last crypto courtroom battle was anything but a slam dunk. Yet while a major challenge, I wouldn’t jump to the conclusion that Coinbase’s chances of riding out this headwind are slim-to-none. Bottom LineĬoinbase has a big fight ahead of it, when it comes from keeping the SEC from regulating the company out of business. The question now is whether the regulatory threat can also be minimized. These many positives suggest that a turnaround for the company is in motion. The crypto financial supermarket also reported another quarter of positive EBITDA ( $194 million). Speaking of which, based on the company’s latest fiscal results, other efforts by the company, like downsizing and cost reductions, continue to be effective in bringing Coinbase back towards profitability. While reporting a net loss for the quarter ( 42 cents per share), this net loss was much smaller than sell-side analysts were expecting (78 cents per share). Not only that, according to Barclays analyst Ramsey El-Assal, this deal could help improve the company’s profitability going forward. While already active in the governance of USDC, this move may bode well, in both increasing the stablecoin’s market share, as well as in keeping competition from the likes of PayPal at bay. However, alongside the bad news, there has been some news that is arguably positive.įor instance, Coinbase’s recent announcement that it is acquiring a stake in Circle Internet Financial, the issuer of stablecoin USD Coin ( USDC-USD). Given the aforementioned challenges, it goes without saying that Coinbase has its work cut out for it. At first asking Coinbase to cease trading in non-Bitcoin cryptocurrencies, then filing a lawsuit against ( for operating as an unregulated broker), the securities agency is clearly trying to make an example out of the most high-profile name in the industry. It’s done this by putting into place a regulatory regime for crypto similar to that as the regulations surrounding other investment classes like stocks and commodities.īecause of these efforts, the SEC has made some aggressive moves against the company. Government’s efforts to make up for lost time. ![]() As I hinted above, Coinbase has become a big target of the U.S. Regarding regulation, this represents the greatest threat to COIN stock moving forward. When it comes to competition, the rising presence of fintech giants like PayPal (NASDAQ: PYPL) in the space is a threat to future growth for this current leader in the crypto space.Īlready a major player in the crypto exchange space, PayPal recently announced that it’s launching its own stablecoin, PayPal USD ( PY-USD). Both are substantial threats to the future performance of the company, and of shares. The market’s current fears about the impact of competition and regulation on Coinbase shouldn’t be dismissed. Even with these challenges, a bull case may remain for shares. With this in mind, you may think that COIN is a clear cut sell/avoid situation, but that may not be the case. As a result, Coinbase now finds itself in the crosshairs of the U.S. Federal Government has long since ceased to take a hands-off approach towards regulating the industry. Why? Not one, but two battles are heating up, creating ample uncertainty for the company, and for shares.įirst, the crypto exchange operator is contending with competition from traditional financial institutions and “disruptive” fintechs alike, to maintain (and grow) its share of the market. However, that’s not the only thing weighing on COIN stock. With Bitcoin ( BTC-USD) prices plunging recently, it makes sense that Coinbase (NASDAQ: COIN) has been under pressure.
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