According to an analyst at Berenberg investment firm, MicroStrategy has become a safer bet in comparison to Coinbase due to the latter’s ongoing regulatory issues. With the US Securities and Exchange Commission (SEC) increasing its scrutiny on the crypto sector, it is anticipated that they will file an enforcement action against Coinbase.
The analyst has suggested that investors would be better off investing in MicroStrategy’s shares rather than Coinbase. MicroStrategy, primarily known as a software company, has become the largest public holder of Bitcoin (BTC). Its shares have risen over 90% year-to-date (YTD), outperforming Coinbase’s 63% increase during the same period.
Bitcoin’s recent rebound contributes to the strong performance of these companies. The flagship cryptocurrency has experienced a 60% YTD gain. The analyst believes that MicroStrategy is an “attractive alternative” to Coinbase, considering the regulatory pressures faced by the latter.
The SEC’s characterization of Bitcoin as a commodity and its assertion that the majority of other crypto assets are unregistered securities puts MicroStrategy in an advantaged position amidst the regulatory onslaught. The enforcement actions against crypto exchanges Kraken and Bittrex, along with crypto lending platform Nexo, could be indicative of the SEC’s approach to Coinbase.
The deteriorating relationship between the SEC and Coinbase has been evident with the legal battle they have been engaged in. The SEC has previously sent a “Wells notice” to Coinbase, threatening the crypto exchange with potential legal actions regarding listed digital assets, and other services like Coinbase Earn, Coinbase Prime, and Coinbase Wallet.
Coinbase CEO, Brian Armstrong, has accused the SEC of engaging in “some really sketchy behavior.” The exchange even filed a lawsuit alleging that the SEC refuses to address Coinbase’s rulemaking petition. Nevertheless, the commission responded by asking a judge to reject Coinbase’s request to compel them to respond to the rule-making petition.
Armstrong has indicated that Coinbase might leave the US if regulators fail to clarify their approach to the digital asset space. Speaking at the Innovate Finance Global Summit last month, he mentioned that “anything is on the table
Source: Cryptonews
