SEC May Develop Counterarguments Against Spot Bitcoin ETFs: Berenberg

Coinbase’s Potential Involvement in Spot Bitcoin ETFs Could Impact SEC’s Rejection

According to a research report by German investment bank Berenberg, Coinbase’s potential involvement in spot bitcoin ETFs could be used as part of the SEC’s reconfigured arguments for rejecting the applications. The SEC may prepare alternative arguments based on concerns about the spot bitcoin market to justify continued rejections. However, analysts believe that Grayscale’s recent legal victory may increase the likelihood of the SEC approving spot bitcoin ETF applications.

Key Points:

The SEC may use Coinbase’s potential involvement in spot bitcoin ETFs as part of their arguments for rejecting applications.
Berenberg suggests that the SEC will prepare alternative arguments based on concerns about the spot bitcoin market.
Grayscale’s legal victory could increase the chances of the SEC approving spot bitcoin ETF applications.
The approval of a spot bitcoin ETF would allow institutional investors greater access to the market.
ETFs are popular because they provide exposure to cryptocurrencies without directly purchasing digital assets.

If the SEC approves a spot bitcoin ETF, it could have a significant impact on the crypto industry by opening up the market to a wider range of institutional investors. While the federal court did not compel the SEC to approve a spot bitcoin ETF, it did require the regulator to revisit the arguments used to reject Grayscale’s application. The SEC also has the option to appeal the court’s ruling.

Following Grayscale’s legal win, crypto-exposed stocks saw a surge, with Coinbase gaining 14.9% and MicroStrategy rallying 10.8%. Berenberg acknowledges that the approval of a spot ETF would benefit bitcoin and, in turn, benefit MicroStrategy. However, for Coinbase, its potential involvement in the ETFs could be used against the applications by the SEC.

Hot Take: Coinbase’s role in spot bitcoin ETFs could play a significant part in the SEC’s decision-making process. While Grayscale’s legal victory may have increased the chances of approval, it remains to be seen how the SEC will respond to the court’s ruling and whether they will consider Coinbase’s involvement as a factor in their decision.