In the wake of a recent court ruling, the U.S. Southern District Court sided to some degree with Ripple, a notable verdict applauded by British banking heavyweight Barclays. According to a research report published by Barclays, this decision is subtly encouraging for cryptocurrency exchange Coinbase, offering a glimpse of a world where not all tokens may be considered securities.
As the analysts at Barclays interpret it, this could potentially influence the clarity around future token issuances. They also maintain an underweight rating on Coinbase’s stock, adhering to their original $70 price target, a decision that took place on July 13th due to lack of positive influences on the cryptocurrency exchange’s share price in the near term.
However, another layer of complexity was added when the Securities and Exchange Commission (SEC) recently filed a lawsuit against Coinbase alleging violation of federal securities law. This followed a closely related legal motion against Binance, a peer in the crypto sphere.
Despite these legal issues, Barclays has sustained its positive stance on Coinbase, resonating with the perspectives of Wall Street firms J.P. Morgan and Needham.
They remark that Coinbase, with its established market position and reputation, is well-placed to enjoy the benefits of enhanced confidence and regulatory clarity. Parallel views persist in a note from Needham analyst John Todaro who maintains a ‘buy’ rating and a $120 price target on the cryptocurrency exchange, arguing that these latest developments might alleviate some regulatory pressure on Coinbase’s stock.
The court’s decision revealed that Ripple’s XRP token, when sold via exchanges or through programmatic sales, can’t really be classified as a security. This ruling, released on July 13th, has benefited Ripple’s shares, triggering a near 30% rise.
Yet, opinions in the financial world tend not to be unanimous. Berenberg, an investment bank, expressed a contrary view on Coinbase’s stock, arguing that the post-ruling rally in the crypto exchange’s shares seemed exaggerated. They suggest that a segment of investors might have misconstrued the ruling, adding another layer of scepticism to the debate around the potential consequences of the recent court ruling.
Source: Coindesk
