Dan Dolev’s view on Coinbase stock after CFTC sued Binance

CFTC sued Binance for violating federal laws to attract U.S. clients.
Mizuho’s Dan Dolev reiterates his $30 price target on Coinbase stock.
He prefers Bitcoin over Coinbase Global Inc to play the crypto space.

On Monday, Commodity Futures Trading Commission sued Binance for violating federal laws to attract U.S. clients.

What does it mean for the Coinbase stock?

Theoretically, that should be an opportunity for rival Coinbase Global Inc (NASDAQ: COIN) to expand its market share.

Still, Dan Dolev – Senior Analyst at Mizuho recommends against investing in the crypto exchange. Explaining why on CNBC’s “Closing Bell: Overtime”, he said:

What you’re seeing now is beginning of the real crackdown on crypto. If I owned any of these crypto names, I’d be really worried. I wouldn’t invest in any public exchange, including Coinbase.

Last week, Coinbase also received a Wells notice from the Securities and Exchange Commission for violating U.S. securities laws. Coinbase stock ended nearly 10% down on Monday.

Dolev prefers Bitcoin over Coinbase stock

Dolev currently has an “underperform” rating on the crypto exchange. His $30 price objective suggests its shares could tank another 50% from here.

There’s no business model. If the government cracks down on altcoins and staking, that’s 35% of Coinbase revenue – on Ethereum, you’re adding another 20%-30%. Then, what are they left with?

Nonetheless, Coinbase Global Inc reported better-than-expected results for its fourth financial quarter in February. It, however, ended Q4 with 8.3 million MTUs (monthly transacting users) versus 8.5 million a year ago.

The Mizuho analyst prefers Bitcoin over Coinbase stock to play the crypto space.