By
Steve Muchoki
April 26th, 2024
Several top Wall Street firms stated that Coinbase is likely to benefit the most from the improved confidence and regulatory clarity coming from the XRP ruling.
On Monday, July 17, British banking giant Barclays said in a research report that the recent XRP ruling by the US Southern District Court shall be “incrementally positive” for crypto exchange Coinbase.
“We view the ruling as incrementally positive for Coinbase, given the interpretation that in some cases a token may not be a security. This may also provide incremental clarity for future token issuances,” noted Barclays.
However, Coinbase has also retained the underweight rating of the Coinbase (COIN) stock with a target price of $70. On July 13, Barclays lowered the rating for the Coinbase stock from equal weight to underweight. As of Monday’s closing, the COIN stock has been trading at $105 levels.
The Coinbase (NASDAQ: COIN) stock has been the talk of the town with a staggering 142% price surge over the last five weeks. Also, the massive rally in the COIN stock price came after financial giant BlackRock named Coinbase as its preferred custodian for its spot Bitcoin ETF application.
Wall Street Firms Have Bullish Call on Coinbase
Other Wall Street firms like JPMorgan and Needham have also given bullish calls for Coinbase. In a note last Friday, banking giant JPMorgan gave a neutral call for the COIN stock. It noted:
“Coinbase is in the best position to benefit from the improved confidence and regulatory clarity given Coinbase’s market leading position and respected reputation in the industry.”
According to Needham analyst John Todaro, who has a buy rating and a price target of $120, the recent ruling regarding Ripple’s XRP token should somewhat reduce regulatory concerns surrounding Coinbase’s stock. On Thursday, a U.S. judge ruled that XRP should not be classified as a security when sold on an exchange or through programmatic sales. Following this announcement on July 13, Coinbase’s stock has increased by approximately 30%.
Cathie Wood, the founder and CEO of ARK Investment Management, has also mentioned that she remains bullish on Coinbase following the XRP ruling. Although the ruling didn’t fully favor Ripple, Wood expressed her satisfaction with the outcome, particularly highlighting its positive implications for crypto exchanges. Wood acknowledged that despite facing regulatory challenges, including a Wells notice in March and an SEC lawsuit in June, Coinbase’s stock price remained resilient and did not reach new lows. This resilience indicates the strong value and stability of Coinbase stock.
SEC vs Coinbase
The US SEC slapped a lawsuit against crypto exchange Coinbase last month over the allegations of operating as an unregistered securities exchange. As per the latest report, Coinbase chief Brian Armstrong is planning to meet the House Democrats on Wednesday.
Sources said that Armstrong will have private discussions with lawmakers from the New Democrat Coalition to address digital asset legislation and related concerns such as taxation, national security, privacy, and climate. This meeting is taking place while Coinbase is facing a lawsuit from the Securities and Exchange Commission.
The Coinbase chief has been actively advocating for clearer regulations on digital assets in Washington. Coinbase, being based in the US, has been urging lawmakers to consider two circulating bills that would offer better guidance on how crypto exchanges can register with regulatory authorities.
The New Democrat Coalition, consisting of 100 center-left members, aims to collaborate across party lines to promote innovative, inclusive, and forward-looking policies, as stated on its website.
