- This is the opinion of analysts at a major German bank
- They believe the SEC sanctions will hit the company hard
- Coinbase risks losing much of its revenue from the U.S. market
The Securities and Exchange Commission (SEC) sent Coinbase a “Wells Notice” in late March.
After that, the regulator did not take any active actions against the exchange. However, this may change soon, analysts at Berenberg Bank believe.
On Monday, May 15, the organization published a report on the exchange and its market position. The bank has begun coverage of Coinbase stock marked “Hold” and a target price of $55.
According to Berenberg’s assessment, SEC regulatory action against the exchange would be similar to that taken against Kraken and Bittrex. It could happen in the near future.
The possible lawsuit from the Commission would be painful for the company’s financial situation.. 86% of Coinbase’s net revenue for the year came from U.S. operations.
The SEC sanctions will primarily affect the company’s revenue in the form of commissions for steaking services and trading various tokens.
This sector alone accounted for 37% of the exchange’s revenues in Q1 2023.
But the bank does not recommend shorting the organization’s stock.. 23% of Coinbase securities have already been sold without coverage.
In this regard, the bank considers too risky “play on the decline.. Despite this, many investors continue to pour money into the company, such as Kathy Wood of Ark Invest.