Coinbase, a leading cryptocurrency exchange, is facing challenges in its lobbying efforts in the United States due to the recent use of cryptocurrency by Hamas militants to fund attacks in Israel, according to a new report by Berenberg Capital Markets. The report, authored by lead analyst Mark Palmer, highlights the regulatory actions and political headwinds arising from the Israel-Hamas conflict as key factors impacting Coinbase’s outlook.
Hamas, a Palestinian militant organization, has reportedly utilized cryptocurrencies for fundraising purposes, particularly in the context of recent attacks on Israel. Last week, Israeli authorities took action by shutting down and seizing over 100 accounts on various cryptocurrency exchanges, including Binance, which were being used to support Hamas in its fundraising efforts. This crackdown resulted in the seizure of millions of dollars worth of cryptocurrency assets.
It is worth noting that while Hamas had previously declared that it would no longer use cryptocurrencies for fundraising due to concerns about authorities tracking transactions on blockchain ledgers, the recent developments have raised questions about the legal status of cryptocurrencies in such situations.
Coinbase has been actively engaged in lobbying efforts in the United States in recent years, seeking clearer and more crypto-friendly regulations. However, these efforts now face headwinds from regulatory actions and political developments linked to the Israel-Hamas conflict.
The report from Berenberg highlights the challenges posed by ongoing regulatory actions against Coinbase in the United States, including efforts to define the legal framework for cryptocurrencies. The use of crypto by Hamas in its fundraising efforts adds complexity to the regulatory landscape.
Coin base’s future uncertainty
In light of the various challenges facing Coinbase, Berenberg analysts have taken a cautious stance on the company. They have reiterated their “hold” recommendation on Coinbase (COIN) stock and maintained a price target of $39. This recommendation reflects their view that, in the near term, Coinbase’s stock presents investment challenges.
Mark Palmer, the lead analyst at Berenberg, noted,
“We continue to view COIN through a cautious lens, especially after the stock has traded up by more than 112% this year versus ~72% for Bitcoin and ~29% for the tech-heavy Nasdaq.”
This cautious stance underscores the uncertainty surrounding Coinbase’s future in the face of regulatory and geopolitical dynamics.
At the time of this report, Coinbase shares were trading at $77.30, representing a 3% increase for the day. The market’s response suggests a level of investor interest and optimism despite the challenges outlined in the Berenberg report.
Coinbase, a major player in the cryptocurrency industry, is facing setbacks in its lobbying efforts in the United States due to the use of cryptocurrency by Hamas for fundraising activities. The regulatory and political implications of these developments are creating uncertainty for Coinbase’s future, and Berenberg analysts have taken a cautious stance in their evaluation of the company.
