Coinbase’s Prediction on Spot Bitcoin ETFs
Coinbase Institutional, a division of the cryptocurrency exchange Coinbase (Nasdaq: COIN) that caters to institutional investors, released its November Monthly Outlook titled “Why an ETF Matters” on Sunday. According to David Duong, Head of Institutional Research at Coinbase, spot bitcoin exchange-traded funds (ETFs) have the potential to bring BTC further into the mainstream and make it accessible to millions of investors in various account structures. Duong believes that in the long run, spot bitcoin ETFs could significantly increase the total crypto market cap and stimulate new investments in the asset class.
Furthermore, the impact of one or more approved spot bitcoin ETFs could open up a massive opportunity for the wealth management community in the U.S., potentially leading to new financial products such as lending and derivatives. According to Coinbase’s report, there is a high likelihood that one or more spot bitcoin ETFs may be approved by the U.S. Securities and Exchange Commission (SEC) before the end of 4Q23.
The current timeline has been affected by gridlock in the U.S. House of Representatives and a potential government shutdown on November 17, which could furlough over 90% of SEC staff. However, Coinbase believes that there is currently an open window for the SEC to be proactive ahead of a possible shutdown.
Additionally, Coinbase noted that recent updates in prospectuses from ETF applicants suggest meaningful dialogue between these teams and the SEC, which is a first for crypto as per Bloomberg Intelligence.
Hot Take: The Potential Impact of Spot Bitcoin ETFs
Cryptocurrency exchange Coinbase predicts that approved spot bitcoin ETFs could significantly increase the total crypto market cap and open up new opportunities for wealth management in the U.S., potentially leading to the introduction of new financial products like lending and derivatives. With improved chances of SEC approval before 4Q23 end, there is optimism for increased inclusion and demand for crypto assets in regulated environments.
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