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The Coinbase stock has rallied by more than 142% year-to-date as of Thursday’s closing. Stocks of several crypto firms witnessed a healthy recovery last month.
On Thursday, February 2, public-listed crypto exchange Coinbase Global Inc (NASDAQ: COIN) saw its stock price shoot up by a staggering 26% after the dismissal of a class-action lawsuit against the company. As of yesterday’s closing, the stock price was trading at $81.46
The lawsuit filed in federal court in New York in October 2021, accused Coinbase of selling 79 digital assets as unregistered securities. It also mentions that this sale amounted to illegal contracts since the platform didn’t register with the US Securities and Exchange Commission (SEC).
Customers who had filed this lawsuit against Coinbase have been seeking refunds in the form of trading fees, token purchases, and other losses incurred by the platform. The lawsuit also added that Coinbase promoted the sale of the tokens by participating in promotions as well as giving news updates about the crypto price movements.
But in a ruling earlier this week, US District Judge Paul A. Engelmayer said that Coinbase’s user agreement “flatly contradict” allegations in the lawsuit that the company holds the title to the digital assets traded on the exchange.
Commenting on the accusations of promotions, Engelmayer said that those activities “are of a piece with the marketing efforts, ‘materials,’ and ‘services’”. Thus, they won’t count as an active solicitation of investments. This news was enough to lift the COIN stock price by a massive 25% in a single trading session.
Crypto Firms Stocks on the Rise
Since the beginning of 2023, crypto firms’ stocks have been on the rise. The broader recovery in the growth stocks has also aided this rally. Since the begging of the year, the COIN stock is already by a staggering 142% as of yesterday’s closing.
During the last month of January 2023, the COIN stock gained more than 75%. But despite this recent recovery, Coinbase shares are still trading at a 76% discount from their all-time high. In a note on Thursday, UK Bank Barclays noted that the volume for the Coinbase stock (COIN) jumped by 56% last month and that “volumes are now near levels seen in October before the collapse of FTX, but remain below the average for 2022.”
Apart from Coinbase, most crypto-linked stocks have also been rallying in the recent recovery amid the broader recovery in equity markets. On Thursday, stocks of business intelligence firm MicroStrategy (NASDAQ: MSTR) and crypto bank Silvergate Capital (NYSE: SI) rallied by a staggering 10% and 30% respectively.
Similarly, stocks of several crypto-mining companies also recovered during the last month of January. Speaking on the development, Edward Moya, senior market analyst for foreign exchange market maker Oanda, said:
“We might be getting six more weeks of winter, but it doesn’t seem like we will be seeing an ice age in crypto. January was a robust month for crypto and the [Federal Open Market Committee rate] decision helped keep all risky assets going higher. Bitcoin is riding this risk-on mood from Wall Street, but it might struggle to break above massive resistance from the $25,000 level”.
More crypto news can be found here.