Mark Palmer, an equity research analyst at Berenberg Capital Markets, believes MicroStrategy is now a safer bet compared to Coinbase due to the exchange’s regulatory issues.
Palmer argues that the SEC is likely to file an enforcement action against Coinbase as the commission increases its scrutiny of the crypto sector. He points to the fact that the SEC has already taken action against other cryptocurrency exchanges, such as Bitfinex and Poloniex.
Palmer also notes that MicroStrategy is not as exposed to regulatory risk as Coinbase. This is because MicroStrategy is a software company that primarily generates revenue from its software products. Coinbase, on the other hand, is a cryptocurrency exchange that is heavily regulated by the SEC.
As a result of these factors, Palmer believes that MicroStrategy is a safer bet than Coinbase. He has a “buy” rating on MicroStrategy’s stock, while he has a “hold” rating on Coinbase’s stock.
It is important to note that Palmer’s view is not shared by everyone. Some analysts believe that Coinbase is still a good investment, despite the regulatory risks. They argue that Coinbase is the leading cryptocurrency exchange in the United States, and that it has a strong track record of growth.
Ultimately, the decision of whether to invest in MicroStrategy or Coinbase is a personal one. Investors should carefully consider their own risk tolerance and investment goals before making a decision.
Here are some additional factors to consider when making your decision:
- MicroStrategy’s business model is more diversified than Coinbase’s. This means that MicroStrategy is less reliant on the cryptocurrency market for its revenue.
- MicroStrategy has a strong balance sheet. This means that the company is well-positioned to weather any regulatory storms.
- Coinbase is more likely to benefit from the growth of the cryptocurrency market. However, it is also more exposed to regulatory risk.