Coinbase (NASDAQ:COIN) was initiated with a Hold rating and $55 per share price target by Berenberg analysts in a research note Tuesday.
They told investors there is "too much regulatory risk" despite the cryptocurrency exchange positioning itself to outlast the crypto winter.
However, "we believe investors should be focusing on whether the company would have the ability to successfully pivot its business model and geographic focus if it were forced to curtail or cease a large portion of its activities in the U.S. as a result of an SEC enforcement action that appears likely to occur soon," the analysts wrote.
The analysts stated that the SEC is likely to file an enforcement action against COIN in the near future, with its "recent actions targeting crypto exchanges Bittrex and Kraken likely offering a preview of that filing."
"We believe those considering investing in COIN would be better served by buying shares of MicroStrategy (MSTR, Buy, $340 PT) given its focus on bitcoin, which the SEC characterizes as a commodity," concluded the analysts.