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June 19, 2024
PI Global Investments

Coinbase’s Involvement Could Spark Delays

Crypto exchange Coinbase will benefit the most out of a possible spot Bitcoin ETF approval. However, its involvement as a middleman between the crypto market and the traditional equities market post-approval is a sore eye for the SEC. Bloomberg’s Michael P. Regan believes that the regal battle between the largest crypto trading platform and SEC could result in a hesitance in a smooth approval of spot-Bitcoin ETF or a possible delay in the process.

Coinbase’s involvement could potentially delay Bitcoin ETF

An ongoing beef between the SEC and Coinbase could make the regulator hang back on the possible timeline or even worse reconsider its decision. Approval for a spot Bitcoin ETF has been on the cards for the past ten years. However, each time SEC has rejected all filings that crossed the tables.

Last June, the SEC sued Coinbase alleging that the company acted as an exchange, broker-dealer, and clearinghouse without registering with the agency for any of those roles.

The breach of trust between the two institutions could become a bone of contention and a significant hurdle in the entire process of the Bitcoin ETF approval.

CoinBase’s upper hand if SEC grants approval

There is no doubt that if the SEC does go ahead with licensing Bitcoin ETFs, Coinbase will be on track to benefit a lot from it.

Regan in the report with Bloomberg says that Coinbase will be a central component of how securities operate, providing multiple key roles including custody, trading execution, market surveillance and even lending.

Recently, ETF issuers including BlackRock have acknowledged they are dependent on Coinbase and have flagged the SEC’s case against the crypto platform in their risk disclosures.

In such a scenario, this rift from the past might influence the SEC’s upcoming decision heavily.

Analysts still positive on a Bitcoin approval

Contrary to all the doubts surrounding the key approval, analysts overall have been singing positive tones with some even expecting early good news to arrive.

Reports from Fox Business and hints from Bloomberg Intelligence analysts suggest that there are chances that the ETF approval may come as soon as this week. However, the larger sentiment is in favor of a certain Bitcoin ETF approval before the January 20, 2024, deadline.

If the Bitcoin ETF trading begins within a matter of days, roughly in February or March 2024, the market sentiment around Bitcoin (BTC) Price could be well placed for an extended bullish wave ahead of the Bitcoin Halving event scheduled for the second quarter of this year.

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