Coinbase Grapples with Regulatory Challenges, Analysts Forecast Volatility Ahead

Bitcoin Coinbase
Last updated:
Author
Fredrik Vold
Author Categories
About Author

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

Bitcoin’s recent decline of more than 10% following the approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC) has not only impacted the crypto market but also raised concerns for companies like Coinbase, according to an analyst. Coinbase stock pricing has shown a tight correlation with Bitcoin price movements according to experts.

In a recent interview with Yahoo Finance, Owen Lau, Executive Director at Oppenheimer, discussed the current state of Bitcoin (BTC) and its implications for financial institutions, investors, and Coinbase.

According to Lau, the price of Bitcoin is a crucial factor affecting Coinbase’s performance, especially in the near term.

He highlighted that the US-based crypto exchange is also facing regulatory challenges, particularly an ongoing lawsuit with the SEC. The regulatory uncertainty in the United States adds to the volatility for Coinbase, despite clearer regulations outside the country.

Near-term Volatility for Coinbase Stock

In the interview, Lau further acknowledged the near-term volatility for the firm’s stock, attributing it to the recent sell-the-news event surrounding the approval of spot Bitcoin ETFs.

He suggested that exchange’s stock could experience downward momentum in the short term, given the rapid increase in both Coinbase’s stock (NASDAQ: COIN, up 400% in 2023) and Bitcoin prices leading up to the ETF approval.

When asked about the importance of the Bitcoin price for Coinbase’s stock valuation, Lau said that it is indeed one of the most significant factors.

Additionally, he highlighted the SEC lawsuit and the industry’s overall health as crucial considerations for the stock’s performance.

50% of revenue from non-trading activities

Addressing Coinbase’s business diversification efforts, Lau noted that around 50% of revenue in the third quarter came from non-trading activities, such as interest income, blockchain income, staking revenue, and custody revenue.

The company’s focus on diversifying revenue streams is seen as a strategic move to reduce dependence on trading alone.

Regarding the impact of Bitcoin ETFs on Coinbase, Lau suggested that, despite the short-term volatility, the introduction of ETFs could be a net positive for Coinbase in the long term.

The ETFs are expected to bring in new investors, supporting higher Bitcoin prices and increased trading volume, ultimately benefiting Coinbase.

More Articles

Bitcoin News
North Carolina and Florida Push for Bitcoin Reserves
Hassan Shittu
Hassan Shittu
2025-02-10 23:39:40
Blockchain News
South Korean Coin Gate Lawmaker Kim Nam-guk Cleared of Wrongdoing
Tim Alper
Tim Alper
2025-02-10 23:30:00
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors