The lack of volume in cryptocurrency markets is also felt in the trading volume of leading crypto exchange, Coinbase. According to the latest report from investment bank Berenberg, Coinbase’s trading volume in the U.S. is decreasing more rapidly than expected in the third quarter.
Berenberg noted that there’s about a 52% annual decline and a 17% quarterly decline in Coinbase’s trading volume. However, despite this decline, Coinbase shares have not lost value since the crypto bull run towards the end of 2021. While Bitcoin increased by 72% and the Nasdaq stock index by 29%, Coinbase shares showed an increase of more than 112% this year.
However, despite this positive stock performance, analysts have some concerns.
“The primary driver of our cautious stance towards Coinbase Global is not our concern about the company’s operating performance during the next couple of quarters, but rather on the threats to its business from the various regulatory actions and litigations that it faces in the U.S., as well as others that it could face in the future as the regulatory crackdown on crypto continues.”Analyst led by Mark Palmer/Coindesk
According to analysts’ statements, intensifying regulatory pressures on cryptocurrencies both in the U.S. and globally could cast a shadow over Coinbase’s operations in the upcoming periods.
In addition, it is noted that political dynamics could also negatively impact the exchange’s lobbying activities. Moreover, the recent news about Hamas using cryptocurrency could make the legal status of cryptocurrencies more complicated.
Following all these developments, Berenberg maintained its hold recommendation for Coinbase shares and kept its price target at $39. However, with a performance above this target, Coinbase shares were at $77.46 in the last closing.