JPMorgan Chase Lowers Coinbase Price Outlook Due to Regulatory Risks

02/18/2023 20:27 • Daily Digest • 125 views

It is reported that a report released by JPMorgan Chase on Friday showed that JPMorgan Chase analysts lowered the price expectation of Coinbase (COIN) stock at the end of the year from $60 to $52. JPMorgan Chase pointed out that the company’s digit-centric businesses (including pledge, USDC stable currency and custody) faced continuous regulatory risks, which was the main reason for the change in the outlook. The analyst wrote: “Although we continue to agree with the consensus that deliberate rules and regulations are necessary to improve people’s confidence in the encryption ecosystem and promote its growth, we believe that regulation through law enforcement is a risk for digital-centric enterprises. The SEC’s recent actions put different encryption businesses at risk, including pledge, USDC stable currency and custody.”

JPMorgan Chase lowered its share price forecast of Coinbase to $52 due to regulatory risk

Interpretation of the news:

JPMorgan Chase, one of the largest financial institutions in the world, lowered its price expectation for Coinbase stock at the end of the year from $60 to $52. The reason for this change is due to the continuous regulatory risks that the company’s digit-centric businesses face, specifically with regards to pledge, USDC stable currency, and custody. The recent actions of the U.S. Securities and Exchange Commission (SEC) have put different encryption businesses at risk, and this is something that JPMorgan Chase analysts are taking into consideration.

It is not surprising that JPMorgan Chase is concerned about regulatory risks, as many companies in the cryptocurrency industry have faced challenges due to the lack of clear regulations. While some argue that regulation is necessary to improve people’s confidence in the cryptocurrency ecosystem and promote its growth, others argue that regulation through law enforcement can be detrimental to digital-centric enterprises. This is because regulations can stifle innovation and growth, and can make it difficult for companies to operate in a rapidly changing and evolving industry.

The SEC has recently focused on regulating companies that use cryptocurrency as part of their business model. This is a significant shift from previous years, when the SEC did not pay much attention to the cryptocurrency industry. As a result, some companies have faced legal action and regulatory scrutiny, which has affected their stock prices and their ability to operate.

For Coinbase, the main impact of the SEC’s recent actions has been on its digital-centric businesses such as pledge, USDC stable currency, and custody. JPMorgan Chase analysts believe that these businesses face the greatest risk due to the regulatory environment. As a result, they have lowered their price expectation for Coinbase stock.

In conclusion, JPMorgan Chase’s decision to lower its price outlook for Coinbase stock is a reflection of the regulatory risks faced by companies in the cryptocurrency industry. While some argue that regulations are necessary to promote growth and improve confidence in the industry, others argue that they can be detrimental to innovation and growth. The SEC’s recent actions have put digital-centric enterprises such as pledge, USDC stable currency, and custody at risk, and this is something that investors need to take into consideration when evaluating companies in the cryptocurrency industry.

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