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Analysts at H.C. Wainwright have said that the crypto winter of 2022 ceases to have any bearing on related stocks.
H.C. Wainwright believes that the crypto winter is over and has called for a buy on Coinbase (NASDAQ: COIN) stock. According to the New York-based investment bank, Coinbase stands to benefit from global digital asset economy growth sooner rather than later. H.C. Wainwright released a statement on Wednesday that underscored its bullishness on the prices of crypto assets.
The investment banking platform wrote:
“Crypto asset prices have rallied 45% YTD, supported by a 67% increase in BTC prices, indicating to us that crypto winter is over and that we have likely now entered BTC’s next bull price cycle (not baked into current estimates), which has historically resulted in significant growth in total crypto market cap, incremental retail, and institutional adoption, and higher crypto trading volumes.”
Summing up these key metrics as a driver of Coinbase’s operating results, including transaction revenues, H.C. Wainwright also said:
“[As a leading exchange in the US and the world], we believe Coinbase is uniquely positioned to benefit from the large and rapidly growing global crypto economy given its trusted brand, easy-to-use products, and focus on compliance and regulation, and we expect the company to gain market share in 2023.”
According to the bank, Coinbase’s revenues would become more “durable” over time due to its increasingly alternate revenue sources. Besides generating income from transaction-based fees, Coinbase has started leaning toward subscription and service revenues.
H.C. Wainwright Analyst Identifies Coinbase as Only Exchange Valued at Over $10 Billion in Light of Crypto Winter
H.C. Wainwright analyst Mike Colonnese posted a ‘Buy’ rating for Coinbase, explaining that “rewards outweigh risks at these prices.” Furthermore, the analyst stated that COIN, currently trading at $54.17, is a “scarce asset” unlikely to change over the near term. Colonnese also pointed out that the major crypto exchange is the only US publicly-listed crypto company with a market cap exceeding $10 billion. As a result, the analyst concluded that competition for investor capital remains extremely limited.
Although the Nasdaq-listed COIN closed 3% lower on Wednesday and at 85% lower than its November 2021 peak, Wainwright analysts opine the stock is still an attractive prospect. These analysts say Coinbase’s share price levels offer investors an attractive entry point because the stock trades at a 35% discount to historical highs.
Coinbase vs SEC
In other recent Coinbase news, the exchange sued the Securities and Exchange Commission (SEC) over crypto regulatory guideline differences. In its lawsuit, the American exchange asked the court to require crypto clarity from the securities regulator. Coinbase called for the SEC to respond to its July 2022 petition promptly. In the previous petition, the exchange suggested that the Commission propose and adopt more explicit regulatory guidelines for the US crypto space via its formal rulemaking process. More than 1,700 individuals and entities have since submitted comments on Coinbase’s petition, also calling for more regulatory clarity from the SEC.
Yesterday, Coinbase firmly responded to a Wells Notice from the SEC last month, claiming no violation of securities laws. The exchange’s chief legal officer Paul Grewal accused the regulator of refusing to engage in meaningful dialogue regarding crypto regulations. Furthermore, Coinbase also suggested that the SEC had been intimidating several other exchanges over securities law violations. However, Coinbase expressed its intent to remain unshaken as it has not committed any wrongdoings.