Coinbase Rally on the Back of XRP Court Ruling Is Overdone: Berenberg
The surge in the crypto exchange’s share price was driven largely by investors who saw the decision as a representing a rejection of the SEC’s argument in the lawsuit it filed against Coinbase in June, the report said.
Coinbase (COIN) shares Thursday after the U.S. District Court dismissed part of the Securities and Exchange Commission’s (SEC) case against Ripple Labs and , however, the extent of the rally may not be warranted, investment bank Berenberg said in a research report.
“The surge was driven in large part by investors who interpreted Judge Torres’ ruling as representing a rejection of the SEC’s argument in the lawsuit it filed against COIN on June 6 that many of the tokens bought and sold in secondary-market transactions on the company’s exchange are unregistered securities,” analysts led by Mark Palmer wrote.
A closer reading of the court’s ruling shows that the judge specifically did not reject that argument, the report said.
The SEC said it was on allegations of violating federal securities law. According to the regulator, Coinbase has operated as an unregistered broker, exchange and clearing agency simultaneously. It solicited customers, handled orders, allowed for bids and acted as an intermediary all at once, the SEC said.
The judge’s ruling “pertained solely to the primary market transactions through which Ripple sold XRP, while COIN is in the business of facilitating secondary-market transactions on its exchange,” the analysts wrote.
Berenberg says the judge’s decision that XRP on a standalone basis is not a security is “immaterial in the context of COIN since she also acknowledges that the sale of XRP can in fact represent a securities transaction.”
The German investment bank has a hold rating on Coinbase shares and a price target of $39. The stock closed yesterday at $107.
Edited by Sheldon Reback.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
VIPBitget VIP Weekly Research Insights
The Base chain has recently seen several major strategic developments: Coinbase has integrated DEX routing for Base on its main app, bridging the gap between CeFi and DeFi liquidity; Shopify has partnered with Base to expand real-world applications and user access points. At the same time, Circle and Coinbase stocks have surged by over 700% and 50% respectively, creating a wealth effect that may spill over into the Base ecosystem—boosting both its TVL and token prices. Recommended projects include: 1) AERO (Aerodrome)—The leading DEX on Base, showing strength despite market downturns; well-positioned to benefit from Coinbase integration. 2) BRETT—A flagship memecoin on Base with over 840,000 holders; likely to lead the next Base memecoin rally. 3) New tokens on Bitget Onchain—Offer early access to emerging Base memecoins while helping users avoid high-risk tokens.
VIPBitget VIP Weekly Research Insights
Recent bullish news surrounding a potential Solana ETF has reignited market optimism. The SEC has asked issuers to update their S-1 filings, signaling that ETF approval could be near. This development has boosted confidence in the Solana ecosystem. As a high-performance Layer-1 blockchain, Solana (SOL) offers fast transactions and low fees, making it a hub for DeFi and NFT activity, while also drawing increasing institutional interest. Jito (JTO), the leading liquid staking protocol on Solana, saw its token surge 17% after JitoSOL was included in a Solana ETF prospectus. Its MEV optimization further enhances network value. Jupiter (JUP), Solana's top DEX aggregator with a 95% market share, recently launched a lending protocol, highlighting strong growth potential. These tokens offer investors early exposure ahead of a possible ETF approval and a chance to benefit from Solana's expanding ecosystem.
Can Solana Ride the Nasdaq Hype to Close Q2 Above $160?
Solana's price rise is fueled by renewed institutional interest and growing trader participation, positioning SOL for a potential breakout above $160.
Bitcoin: Scarcity Deepens With Every Block Mined
Crypto prices
More
