- CFTC has accused Binance of breaching US federal laws to entice US customers.
- Dan Dolev of Mizuho held a firm stance on Coinbase’s stock, maintaining his $30 price point.
- Preferring Bitcoin to the crypto exchange, he warned investors to be wary of such stocks.
The Commodity Futures Trading Commission (CFTC) has recently filed a lawsuit against Binance for violating federal laws in an attempt to draw in US customers.
What does this mean for Coinbase’s stock?
This could be seen as a potential opportunity for Coinbase Global Inc (NASDAQ: COIN) to gain market share. Dan Dolev of Mizuho, however, advises against it. On CNBC’s “Closing Bell: Overtime”, he said:
What we’re seeing now is the start of a real crackdown on crypto. If I owned any of these crypto stocks, I’d be really cautious. I wouldn’t recommend investing in any public exchange, including Coinbase.
The Securities and Exchange Commission (SEC) has also issued Coinbase a Wells notice due to possible violations of US securities laws. As a result, Coinbase’s stock dropped by 10% on Monday.
Dolev prefers Bitcoin over Coinbase
Dolev has an “underperform” rating on the crypto exchange, suggesting that its share value could fall by another 50% from its current position. He explained:
There’s no business model. If the government cracks down on altcoins and staking, that’s 35% of Coinbase’s revenue – with Ethereum, you’re looking at an additional 20%-30%. What would be left then?
Despite this, Coinbase posted better-than-expected financial results for Q4, though their Monthly Transacting Users (MTUs) dropped from 8.5 million to 8.3 million year-on-year.
The Mizuho analyst strongly suggests choosing Bitcoin over Coinbase’s stock if one wishes to invest in the crypto space.