Coinbase, a leading crypto exchange, stands to benefit greatly from the approval of a spot Bitcoin ETF. However, this involvement has raised concerns for the Securities and Exchange Commission (SEC), who may hesitate to approve the ETF or potentially delay the process due to their ongoing tensions with Coinbase.
The battle between the SEC and Coinbase has been ongoing for some time, and it could impact the decision on the ETF approval. The SEC has rejected all past filings for a Bitcoin ETF over the past decade. In fact, the SEC even sued Coinbase in June for allegedly operating as an exchange, broker-dealer, and clearinghouse without proper registration.
This breach of trust between the two institutions could be a major hurdle in the approval process for the Bitcoin ETF. On the other hand, if the SEC does approve the ETF, Coinbase will be in a prime position to benefit significantly.
According to Bloomberg’s Michael P. Regan, Coinbase will play a crucial role in the functioning of the ETF, providing custody, trading execution, market surveillance, and lending services. This has been acknowledged by ETF issuers like BlackRock, who have mentioned the SEC’s case against Coinbase in their risk disclosures.
Given this history, it is possible that the SEC’s decision on the Bitcoin ETF may be influenced by their past dispute with Coinbase. However, analysts remain optimistic about the approval, with some even expecting it to happen as early as this week. The general sentiment is in favor of an eventual approval before the January 20, 2024 deadline.
If the ETF is approved and trading begins in February or March of this year, it could have a positive impact on the market sentiment around Bitcoin’s price. This could lead to an extended bullish wave ahead of the Bitcoin Halving event in the second quarter of 2024.