JPMorgan Chase Lowers Coinbase Price Expectation Due to Regulatory Risks

02/18/2023 20:27 • Digital Disruptors • 76 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

Analysis based on this information:

JPMorgan Chase’s report released on Friday revealed that analysts have revised their year-end price expectation for Coinbase (COIN) stock from $60 to $52. The primary reason for this change in outlook is the continuous regulatory risks faced by the company’s digit-centric businesses, including pledge, USDC stable currency, and custody.

The analysts note that while they agree with the consensus that deliberate rules and regulations are necessary to promote the growth of the encryption ecosystem and improve people’s confidence in it, regulation through law enforcement remains a significant threat to digital-centric enterprises. The recent actions by the SEC, they say, have put different encryption businesses at risk, including those offered by Coinbase.

The SEC’s recent efforts to crack down on fraudulent securities offerings and the lack of regulatory guidance on cryptocurrencies have caused concern among investors and businesses alike. The agency is also investigating Coinbase’s planned lending program, which has prompted the company to delay its launch.

JPMorgan Chase’s report highlights the importance of regulatory compliance in the cryptocurrency industry, as companies face significant risks of legal and reputational harm if they fail to comply with regulatory standards. The report advises investors to carefully evaluate the risks associated with digital assets and to ensure that their investments are consistent with their risk appetite and investment objectives.

In conclusion, JPMorgan Chase’s report underscores the ongoing regulatory risks facing companies operating in the cryptocurrency industry, including Coinbase. While the analysts recognize the need for regulations to improve the confidence and growth of the industry, they caution that regulatory actions must be deliberate and well-calibrated to avoid unintended consequences. As the industry continues to evolve, it is clear that regulatory compliance will remain a key factor in the success of companies operating in the digital asset space.

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JPMorgan Chase Lowers Coinbase Price Expectation Due to Regulatory Risks

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

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