Shares of companies with exposure to cryptocurrencies rose this week as investors cheered a key verdict on one token as a win for the industry.
Coinbase Global, Inc. has acquired 34% this week, its best performance in the period since mid-March, although it closed down 1.6% on Friday.
Other crypto-related stocks also had a positive weekly performance. Robinhood Markets, Inc. rose. Up 15% this week, its best level in nearly a year, and Bakkt Holdings Inc. by 30%. Bitcoin mining companies such as Marathon Digital Holdings and Hut 8 Mining Corp. have also witnessed. and Riot Platforms, Inc. and Cipher Mining Inc. Weekly gains, even with some selling on Friday.
Thursday’s ruling was that Ripple Labs Inc.’s token. It is a security that when sold to institutional investors – but not to the general public – is the largest contributor to gains. The resolution has been added to optimism On Bitcoin ETF applications that lifted investor and Bitcoin sentiment earlier in the week.
“This is a positive read for COIN because it sets a precedent that cryptocurrency token sales through exchanges, at least in the case of XRP, have not violated securities laws,” Needham analyst John Todaro wrote in a note, raising the price target to $120. From $70 per share purchased. “We believe this result should moderately reduce the risk of regulatory pressure on the stock.”
Benjamin Salisbury of Height Capital Markets said in a note that the decision was specific to the nature of Ripple and should not be applied hastily across the industry.
“We note that the ruling is factual in this case alone and we caution against broad application of this ruling to the Coinbase lawsuit,” Salisbury said. “We also expect the SEC to appeal the ruling, given the potential implications of securities laws.”
Outside of regulations, short covering could also lift cryptocurrency-related stocks whose 2023 highs have narrowed contrarian traders.
Last month, short sellers bought $407 million worth of Coinbase shares to get out of their positions, according to data from S3 Partners LLC. This year, Coinbase shorts suffered $2.9 billion in fiat losses, making it the seventh least profitable short company after Tesla Inc. and Nvidia Corp. and Apple Inc. and Microsoft Corp. and Meta Platforms Inc. and Amazon.com Inc. .