Berenberg suggests reports that Hamas used crypto ahead of Israel attacks may make Coinbase's drive for regulatory clarity more difficult.
Coinbase continues to face threats on the regulatory front in the U.S., despite its lobbying campaign to push Congress for increased clarity, Berenberg Capital Markets said in a research note, reiterating its "hold" recommendation on the stock and price target of $39.
Reports that Hamas used cryptocurrency for fundraising ahead of attacks in Israel earlier this month may complicate Coinbase's efforts to push for friendlier legislation from Congress, he added. "While Hamas announced last April that it would no longer use crypto for fundraising due to the ability of authorities to track its movement on blockchain ledgers, we believe the recent headlines are likely to make clarity around the question of crypto's legal status even more elusive," Palmer said.Coinbase shares rose 4.3% on Tuesday to $78.26 at 11:26 a.m. ET, according to TradingView. While shares have declined 5.4% over the past month, they're up 115% over the past year.
"The company’s defense against the lawsuit that the SEC filed against it appears likely to be an overhang on its share price for some time to come," Palmer said. He noted that Berenberg had raised its estimate of the company's consumer transaction revenue to $240.8 million from $210 million to reflect "our expectation that its consumer take rate will contract at a slower pace than we had been anticipating.
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