Is now time to buy into crypto firms? As the landmark victory was made in the ruling of Ripple Labs Inc., U.S. District Judge Analisa Torres in New York ruled that Ripple Labs was not violating securities law with its sale of XRP tokens on exchanges. Industry experts believe that with this ruling, crypto firms and exchanges can now defend their operations and challenge SEC's jurisdictions. But how did it start?
Ripple vs. Sec, how did it start?
In 2020, the SEC filed a lawsuit against Ripple Labs Inc alongside its executives, alleging their offering worth $1.3 billion through the sale of XRP was “unregistered securities.” This raised questions about cryptocurrency regulatory status, leading to further investigations into various digital asset exchanges.
However, on July 13, 2023, U.S. District Judge Analisa Torres in New York ruled in favor of Ripple Labs. According to the ruling, the sale of XRP on public cryptocurrency exchanges did not constitute offers of securities. The ruling emphasized that “purchasers did not have a reasonable expectation of profit that depended on Ripple's efforts, a significant criterion in determining whether XRP could be classified as a security at the time of its sale”.
The ruling is marked by most as the first significant legal setback the SEC has faced in its efforts to regulate the rapidly growing crypto industry. The ruling and overall outcome have become a game-changer for crypto.
This begs the question, which crypto companies should you invest in? Let’s look at some buy-rated firms operating in the crypto market.
Terrawulf Inc. (WULF)
Terawulf Inc. is an infrastructure-focused digital asset technology company engaged in sustainable bitcoin mining. The company develops, constructs, and operates several Bitcoin mining facilities in the U.S. that are powered by clean, reliable, and low-cost power sources. The company is developing two mining facilities:
- Lake Mariner in New York, and
- Nautilus Cryptomine Facility in Pennsylvania.
Terrawulfs' subsidiaries include Lake Mariner Data LLC and Kyalami Data LLC. With its drive to sustainability, the company has been producing Bitcoin powered by nuclear, solar energy, and hydro domestically.
On May 15th, 2023, the company disclosed that its hash rate capacity has increased to 3.3 EH/S, an increase of 65% as of Q1 2023. The company also reported having self-mined 533 Bitcoin in Q1.
Analyst Ratings
Analysts rate WULF as a “Strong Buy” based on 2 Strong buy recommendations from analysts. The mean target price is set to $3.62 and a high target price of $4.25, a target upside of 17.40%.
Stronghold Digital Mining Inc. (SDIG)
Stronghold Digital Mining Inc. is a crypto mining company that owns and operates environmental coal refuse power generation facilities in Pennsylvania. Its facilities are located in Sribgrass Township and Nesquehoning, Pennsylvania. Its Panther Creek Plant in Nesquehoning is recognized as an alternative energy system. The company has a hash rate of 2.6 EH/S and operates approximately 29,500 miners.
The company has been actively improving the environment through its coal refuse sites in Pennsylvania. The company uses the coal refuse from piles in the area to generate power for their mining with their wholly owned generation facilities.
One of the company's main appeals is in its vertical integration, wherein it operates a pair of waste coal-burning facilities across Pennsylvania. These facilities generate electricity to power their miner fleet saving on costs, opening the ability to engage in energy sales while receiving tax credit incentives.
Analyst Ratings
Analysts rate SDIG as a “Moderate Buy” based on 2 Strong buys and 1 Hold from analyst recommendations. The mean target is $16.38, and a high target price of $22.50, an upside of 189%.
Greenridge Generations Holdings Inc. (GREE)
Greenridge Generations Holdings Inc. is a cryptocurrency data center that operates a power generation company making it a vertically integrated crypto mining firm. The company owns facilities in New York and South Carolina. GREE's data centers earn bitcoin by supporting the global Bitcoin network with their miners or those leased by the company. Its 106-megawatt power facility also sells electricity to the New York Independent System Operator (NYISO) power grid based on prevailing wholesale prices and demand for electricity.
The company previous financial quarter experienced a slowdown in both revenue and earnings. However, the renewed sentiment with the crypto industry has propelled prices that may support Greenridge back and be a recovery play for investors.
Analyst Rating
Only 1 analyst covers GREE and rates it as a “Strong Buy”. The target price is set to $20.00, an upside of 141.25%.
Final Thoughts
The victory in SEC v. Ripple represents a pivotal moment between the crypto industry and regulatory authorities. This landmark decision gives the crypto market newfound confidence in challenging the SEC's oversight. However, even with this win by the crypto market, time will still tell if this will finally push crypto into even wider adoption.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
