Coinbase Stands to Gain the Most from Bitcoin ETF Approval

The Coinbase exchange is poised to reap significant benefits from the approval of a Bitcoin ETF. However, its involvement as an intermediary post-approval poses a concern for the SEC, according to Michael Regan of Bloomberg. The unfolding pseudo-battle between the largest cryptocurrency trading platform and the SEC could lead to hesitancy in smoothly approving the Bitcoin ETF or potentially cause delays in the process.

Tensions between the SEC and Coinbase may prompt regulatory authorities to postpone, or even worse, reconsider their decision timeline. The approval of a Bitcoin ETF for immediate trading has been under consideration for the past decade, yet the SEC has consistently rejected all applications.

In June of the previous year, the SEC filed a lawsuit against Coinbase, alleging that the company operated as an exchange, broker-dealer, and clearing agency without registering with the regulatory body for any of these roles. The breach of trust between the two organizations could become a contentious issue and a significant obstacle throughout the Bitcoin ETF approval process.

Regan, in his report to Bloomberg, suggests that Coinbase will play a central role in the functioning of the securities market, providing various key roles including custody, trade execution, market surveillance, and even lending.

Recently, ETF issuers, including BlackRock, have acknowledged their reliance on Coinbase and cautioned the SEC against the cryptocurrency platform in their risk disclosure statements.

In such a scenario, the fractures in this historical relationship could significantly impact the SEC’s upcoming decision. Despite doubts surrounding the crucial approval, analysts, in general, have expressed positive views, and some even anticipate favorable news in the near future. Reports from Fox Business and insights from Bloomberg Intelligence analysts suggest that the approval of the ETF could happen as early as this week. However, the prevailing sentiment is that the strong endorsement of approving the Bitcoin ETF may come before the January 20, 2024 deadline.

If Bitcoin ETF trading begins in the coming days, around February or March 2024, market sentiment surrounding Bitcoin’s price could be well-positioned for an extended bullish trend leading up to the anticipated Bitcoin Halving event in the second quarter of this year.