Cathie Wood, CEO and CIO of ARK Invest, recently added to her fund’s position in Coinbase Global stock and reiterated her call for a $1 million Bitcoin price. She believes that SEC enforcement will lead Coinbase to become the only US-based cryptocurrency exchange in the market, assuming they triumph in their own legal battles with the SEC.
Despite the average analyst consensus being a Hold rating for COIN with an average price target of $58.49, Wood remains bullish on the stock due to its potential as the sole game in town. However, analysts caution against basing an investment thesis on just one factor. Coinbase is also facing a lawsuit from the SEC regarding the trading and staking of unregistered securities, which could lead to the exchange being deemed to have participated in illegal activities. Moreover, rumors are circulating that Coinbase may have invested in projects before they became available to the public, leading to suspicions of an orchestrated pump-and-dump scheme. If proven true, this could constitute a financial crime of epic proportions.
In terms of Bitcoin, Wood believes it is a hedge against inflation and can still outperform even in a deflationary environment by being an antidote to counterparty risk in the traditional financial system. The next Bitcoin halving event is less than a year away, and investors are currently in the accumulation phase of the cycle. It remains to be seen whether Wood’s $1 million price prediction will come to fruition during the next cycle top.
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