COIN shares are down more than 85% from their all-time high. Coinbase is considering relocating offshore, but analysts are skeptical of the plan. 84% of Coinbase’s total revenue came from US markets in 2022.
Experts are bearish on Coinbase stock as the exchange struggles with regulations and competitive challenges. Along with the crypto market rally, Coinbase shares COIN are also up more than 80% in 2023. Although the stock is trading at $57, it currently has a long way to go to recover from the damage inflicted by the bear market.
COIN reached an all-time high of $429 in April 2021 and has since seen a significant decline of more than 85%. Coinbase shares face resistance in the $85 price range, on the weekly time frame. It needs to close weekly above the $85 mark, on strong volume, to continue its 2023 uptrend.
Additionally, COIN shares should hold their support at around $50. If not, it could signal a reversal of the 2023 uptrend.
Will the Offshore Relocation Hurt Coinbase?
The lack of clear regulations in the United States has frustrated Coinbase CEO Brian Armstrong, who at Fintech Week in London said that “Everything is on the table, including relocation or whatever it takes.”
In fact, the exchange has managed to obtain a license to operate in Bermuda. However, according to the WSJ, some analysts are skeptical about the stock moving abroad. Dan Dolev, a senior analyst at Mizuho Securities, told the WSJ:
“This is not going to help them if the US market is not going to be what it was in 2021. There are a lot of international players out there. Coinbase only has an advantage in the United States because they are so dominant.” About 84% of Coinbase’s total revenue came from US markets in 2022.
Battling with the SEC
Coinbase received a notice of Wells from the Securities and Exchange Commission (SEC) threatening enforcement action in late March. In retaliation, the exchange responded by suing the SEC, hoping to force the federal regulator to clarify positions on cryptocurrencies, as well as to explore the possibility that current securities processes and rulemaking could be applied to the cryptocurrency industry.
Due to the legal turmoil involving Coinbase, experts are bearish on COIN stock. Jason Kupferberg, a research analyst at Bank of America, has this to say:
“The Wells Advisory is the latest data point to illustrate that there are some pretty significant regulatory headwinds and uncertainties that are likely to continue to be a drag on the company and on the stock.”
COIN stocks represent the broader crypto market, as explained by The Motley Fool;
“Investors who are optimistic about the future of cryptocurrencies can buy Coinbase as a bet on the growth of the entire industry. And by doing so, they wouldn’t have to choose individual tokens for their wallets.”
Earlier this month, Coinbase was reported to have rebounded by 90% on the stock market so far this year, but the turmoil caused by the SEC has caused the value to plunge 12% in the last month. According to Barclays, the worst outcome of the regulator’s action would be listed as a stock exchange if various crypto assets are deemed as such by the SEC.
By Audy Castaneda
