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Banking Giant Barclays Backing Coinbase After XRP Win Over SEC: Will $COIN Keep Rising?

Published July 18, 2023 1:25 PM
Teuta Franjkovic
Published July 18, 2023 1:25 PM
Key Takeaways
  • Wall Street analysts, including Barclays are praising the XRP decision for Coinbase
  • Wall Street institutions, including J.P. Morgan, believed the decision would benefit the cryptocurrency exchange

The decision by the U.S. Southern District Court to partially side with payments network Ripple is “incrementally positive” for cryptocurrency exchange Coinbase (COIN), according to a research paper released on Monday by British banking behemoth Barclays.

The Judgement Is Positive For Coinbase

“Given that in some circumstances, a token may not be a security, we consider the judgment incrementally positive for Coinbase,” according to the bank’s analysts, who kept COIN’s rating underweight with a $70 price target. This might offer further clarification for further token issuances.

On July 13, Barclays reduced its rating for Coinbase shares from equal weight to underweight because it anticipated limited near-term drivers for the cryptocurrency exchange’s share price.

Following a similar lawsuit against rival Binance, the Securities and Exchange Commission (SEC) recently accused Coinbase of breaking federal securities legislation.

Barclays made a favorable prediction about Coinbase, which is consistent with what J.P. Morgan and Needham on Wall Street said.

According to a note published by J.P. Morgan on Friday, which rates COIN as neutral, “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.”

Similarly, John Todaro of Needham, who has a buy rating and a $120 price target, stated that the result should only slightly lessen the possibility of regulatory pressure on Coinbase’s stock.

Not All Experts Are Optimistic

After the XRP verdict, not all experts had the same optimistic outlook on Coinbase’s price. The cryptocurrency exchange’s share price increase was exaggerated, according to investment bank Berenberg, which also suggested that some investors may have partially misunderstood the decision.

Coinbase Vs. SEC In Short

On June 6, the U.S. Securities and Exchange Commission brought legal action against Coinbase. The federal agency subsequently asserted that Coinbase operated a national securities exchange and broker without a license through its cryptocurrency asset trading platform.

The SEC further asserted that at least 13 crypto assets, including the tokens for Solana and Cardano that Coinbase made available to customers, meet the criteria for “crypto-asset securities,” according to the complaint.

According to the SEC, Coinbase’s staking program is both an investment contract and an unregistered security because it enables cryptocurrency investors to “earn financial returns through Coinbase’s managerial efforts.”

Following the SEC’s announcement, Coinbase co-founder and CEO Brian Armstrong tweeted, among other things, “Regarding the SEC complaint against us today, we’re proud to represent the industry in court to get some clarity around crypto rules finally.”

While the commission investigates the most recent ETF application involving Coinbase, the litigation is still active.

Since then, Coinbase has requested that the SEC’s case be dismissed, arguing that the SEC lacks jurisdiction and that its transactions do not fall under the definition of securities.

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