- Ark Invest is bullish on the Coinbase shares as Cathie Wood expects the exchange to win its case against SEC.
- Cathie Wood also doubled down on her $1 million price prediction for Bitcoin, expecting the asset to be heavily embraced as a hedge against inflation.
The US Securities and Exchange Commission recently sued Coinbase competitor, Binance, for failing to acquire the necessary license to offer some alleged unregistered securities listed on the platform together with 12 other charges. While many crypto enthusiasts are concerned about the long-term impact on the crypto industry, Ark Invest’s Cathie Wood is rather bullish on Bitcoin and doubling down on Coinbase shares (COIN).
According to her, the recent attack on Binance could make Coinbase the only active renowned crypto exchange in the US. It is important to note that Coinbase is having its fair share of the legal battle with the SEC. However, Cathie Wood expects a victory for the crypto exchange. According to her, there are differences in the allegations leveled against both exchanges.
What Makes the Binance Case Different
Per her observation, Binance may be facing more serious charges despite both exchanges having common allegations of trading and staking of unregistered securities. U.S. regulator for derivatives has also filed a civil enforcement action against the CEO of Binance Changpeng Zhao (CZ).
It is alleged that CZ together with the three of the exchanges’ affiliates violated the Commodity Exchange Act and some of the Commodity Futures Trading Commission regulations. Cathie strongly believes that this allegation cannot be compared to the ones leveled against Coinbase, hence, they would certainly survive.
It can be recalled that the company purchased about 330,00 Coinbase shares worth around $17 million on June 6, 2023. In addition, Exchange-Traded Funds (ETF) namely: Ark Fintech Innovation ETF and Ark Next Generation Internet ETF purchased 35,700 shares (worth $1.8 million) and 53,900 shares (worth $2.8 million) respectively.
As of press time, COIN was trading at $53.90. Analysts including John Todaro and Atlantic Equities have come up with $70 as a target price. For now, the analyst consensus on Coinbase is said to be a Hold rating with an average price of $58.95.
Cathie Wood Predicts $1 Million for Bitcoin
In an interview with Bloomberg, Cathie Wood reiterated her $1 million price prediction for the Bitcoin (BTC) price. In her statement, Bitcoin is a hedge against inflation. She also observed deflation as a substantial risk in the future. In February, the Bitcoin 50-day exponential moving average (EMA) went past the 200-day EMA. Interestingly, there has been a decline in volume together with the Chaikin money flow.
This shows that there is a potential sideways trading. Cathie is very bullish on Bitcoin because she believes the asset can still outperform in a deflationary environment. She thinks this is “an antidote to counterparty risk in the traditional financial system.”
Currently, Bitcoin Investors are accumulating the asset awaiting the next Bitcoin halving expected in 2024. In the first quarter of the year, Ark Invest predicted in a published report that Bitcoin could hit $1.48 million by 2030. At the time of the prediction, Bitcoin was trading at $23,000, meaning the asset was expected to surge by more than 6,300 percent in seven years to record that price point.
As of press time, Bitcoin was trading at $26,799.83 with bullish market sentiment. The asset is up by 2.7 percent in the last seven days.
