Hack? SEC Investigation? Coinbase Stock Soars Despite Turbulent Week
In a volatile week, as the cryptocurrency market stagnated and legal and security risks loomed, Coinbase (COIN) stock unexpectedly surged, posting its best weekly performance since November.
Coinbase Stock Hits New 2025 High
Coinbase stock closed at $266 per share on May 16, its highest since February and 88% above its yearly low. At that price, Coinbase's market capitalization reached about $67.8 billion.
1. Cryptocurrency Market Slows Down
Bitcoin continued to struggle around $105,000 and many altcoins saw double-digit declines, marking a pause in the previous strong growth.
2. Shocking Internal Hack
Coinbase revealed that it had been hit by a cyberattack that could cost up to $400 million. The hackers reportedly worked with an overseas employee, accessed sensitive data, and demanded a $20 million ransom. Coinbase said it would not pay the ransom, but would offer a reward for information leading to the arrest of the perpetrators.
3. SEC Investigation
The US Securities and Exchange Commission (SEC) is investigating Coinbase for possible misrepresentation of its user base. The SEC suspects the company of inflating its verified user base by more than 100 million. Coinbase has denied the allegations, saying it stopped publishing that number two years ago.
Why is Coinbase’s stock still soaring?
Market Confidence Remains Strong
Despite the risks, investors remain confident in Coinbase’s long-term prospects. Analysts say these events do not have a major impact on the company's core business model:
The crypto market may be in a short-term correction, but many large institutions such as Ark Invest and BlackRock remain long-term believers in Bitcoin, with forecasts of $2.4 million and $700,000, respectively.
The hack is not a death sentence: History shows that many companies such as Equifax, Target, Home Depot and Capital One have recovered strongly from cybersecurity incidents. Coinbase is likely to have cybersecurity insurance to mitigate the damage.
The SEC investigation may end soon: Several investigations initiated under Gary Gensler were discontinued when policies changed. This could happen again under new leadership.
Addition to S&P 500 is a powerful catalyst
The most important thing that helped Coinbase's stock price skyrocket was the news that COIN will be officially included in the S&P 500 index next week. This forced hundreds of ETFs and index funds to buy Coinbase shares to balance their portfolios, creating a huge demand force in the market.
Conclusion
Despite being surrounded by negative information, Coinbase once again proved its resilience and appeal to investors. The belief in the long-term development of the crypto market, along with Coinbase's growing role in the digital financial ecosystem, are strong supporting factors for COIN stock's growth in the coming time.
