Berenberg lead analyst Mark Palmer suggests that recent reports of Hamas using cryptocurrency to finance attacks in Israel might pose challenges for Coinbase’s lobbying efforts.
Hamas’s use of cryptocurrency to fund attacks in Israel could impede Coinbase’s lobbying efforts in the United States, as noted in a recent report by Berenberg Capital Markets. Regulatory actions and political challenges related to the Israel-Hamas conflict are factors in Mark Palmer’s caution regarding Coinbase.
The Financial Times recently reported that Israeli authorities took action to shut down and confiscate over 100 accounts on cryptocurrency exchanges, including Binance, which were used to support Hamas in their fundraising activities. As part of these measures, Israeli authorities seized cryptocurrency holdings worth millions of dollars.
“Despite Hamas having declared in April that it would cease employing cryptocurrencies for fundraising, citing concerns about authorities’ ability to monitor transactions through blockchain technology, we anticipate that recent developments will further complicate the already unclear legal stance on cryptocurrencies,” Palmer stated.
In recent years, Coinbase has significantly increased its lobbying efforts in the United States, aiming to foster more transparent and crypto-friendly regulatory measures.
Berenberg analysts have reiterated their “hold” recommendation for Coinbase (COIN) shares and maintained a price target of $39.
At the time of publication, Coinbase shares were trading at $77.30, reflecting a 3% increase for the day, as reported by TradingView
“COIN’s impressive YTD performance, up over 112%, compared to Bitcoin’s 72% and Nasdaq’s 29%, warrants our cautious ‘Hold’ rating.”
Palmer mentioned that Coinbase’s legal battle with the SEC could continue to affect its stock price positively. Despite lower trading volumes due to the crypto market’s decline, Berenberg raised its revenue estimate to $240.8 million, expecting Coinbase’s fees to decrease more slowly. The company’s substantial cash reserves and cost-cutting efforts provide financial flexibility, making shorting the stock a risky move amid the ongoing legal dispute with the SEC.
