Coinbase stock price holding up despite arbitration ruling
While a recent ruling from the US Supreme Court caused the Coinbase stock price to wobble, it continues to recover from recent lows.
Coinbase stock price holding up despite arbitration ruling
While a recent ruling from the US Supreme Court caused the Coinbase stock price to wobble, it continues to recover from recent lows.
Coinbase's stock price is holding up well despite the recent legal news involving a Supreme Court ruling against the cryptocurrency exchange. After drifting lower from its March record high, the stock price appears to have stabilized and formed a low.
Strong Q1 performance fuels optimism
The largest US cryptocurrency exchange posted impressive first-quarter (Q1) revenue of $1.6 billion, a 72% increase quarter-on-quarter. Coinbase reported net income of $1.18 billion (or $4.40 per share), fuelled by a boost in transactions due to the wider crypto market's upswing and a favourable change to crypto accounting rules.
Consumer transaction revenue doubled from the previous quarter, reaching $935.2 million, with volume up over 93% to $56 billion. The institutional trading segment saw even greater increases, with revenue up 133% to $85.4 million and volume more than doubling to $256 billion. Bitcoin accounted for a third of both consumer and institutional transactions.
Arbitration ruling has limited impact
The US Supreme Court unanimously ruled against Coinbase in an arbitration case involving a dispute over conflicting arbitration clauses in two separate contracts. The case stemmed from a Dogecoin sweepstakes competition in 2021 and was not directly related to Coinbase's core cryptocurrency business.
The ruling affirmed that when parties are bound by two distinct contracts with contradictory arbitration provisions, courts, not arbitrators, must determine which agreement applies and whether the dispute should proceed to arbitration. Legal experts view the decision as having limited broader applicability, as it addresses a fairly narrow scenario unlikely to arise frequently.
Anticipation for Major Crypto Regulatory Rulings
While this case had little direct relevance to the digital assets sector, the cryptocurrency industry eagerly anticipates future Supreme Court decisions that could resolve ongoing legal battles between crypto firms and US regulators over jurisdictional issues. However, such cases may take years to reach the high court.
Despite the narrow legal setback, Coinbase's strong financial performance and the limited scope of the Supreme Court ruling have helped maintain investor confidence, as reflected in the stock's resilience.
LSEG Data & Analytics analyst Coinbase recommendations
LSEG Data & Analytics data shows a consensus analyst rating of between ‘buy’ and ‘hold’ for Coinbase – 5 strong buy, 6 buy, 14 hold and 2 sell with a mean of estimates pointing to a long-term price target of $130.42, approximately 8% below current levels (as of 28 May 2024).
Coinbase – technical view
The Coinbase share price, up over 50% year-to-date, is about to test its late-April high at $239.00, a rise above which would confirm its May bottoming formation with the Mar peak at $283.48 then being back in sight. Further up beckons the minor psychological $300.00 mark.
Coinbase Daily Chart
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
