Coinbase CEO Brian Armstrong Optimistic About Bitcoin ETF Approval
Despite the Securities and Exchange Commission’s (SEC) previous resistance, a spot Bitcoin ETF has been a highly anticipated development in the crypto industry. However, Coinbase CEO Brian Armstrong believes that approval for a Bitcoin ETF is imminent.
Armstrong clarified that he does not possess any inside information on the matter but stated that based on publicly available information, it seems that progress is being made towards approval. He expressed his optimism, saying, “I’m pretty optimistic we’ll see something approved on an ETF next year.”
SEC’s Failures in Court
Armstrong pointed out the SEC’s failures in court as evidence of a potential Bitcoin ETF approval. The courts have challenged the SEC’s reasons for denying ETF applications and have urged them to provide valid justifications for rejection. This suggests that the SEC will eventually have to approve a Bitcoin ETF.
The U.S. Court of Appeals recently ordered the SEC to review Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. If the SEC denies this application, it will need to provide new grounds unrelated to its previous arguments against the futures Bitcoin market’s connection to the spot market.
Last week, the SEC met with Grayscale to discuss its application, indicating progress towards potential approval.
Recent Delays and Potential Approvals
The SEC recently delayed the review of Franklin Templeton and Hashdex’s ETF applications until January 1. Bloomberg analysts suggest that this delay could pave the way for simultaneous approvals of multiple ETFs before January 10.
Coinbase and ETF Custody
Out of the 13 issuers seeking to launch a Bitcoin ETF, 10 have chosen Coinbase Custody as their custodian. This means that Coinbase could hold billions of dollars’ worth of Bitcoin on behalf of these funds, leading to concerns about centralization.
Armstrong dismissed these concerns, stating that it reflects the trust placed in Coinbase. He mentioned that Coinbase has securely stored “tens of billions” in crypto over the past decade. Other players, such as Fidelity and Gemini, have also entered the custody space for Bitcoin ETFs.
Approval of a spot Bitcoin ETF would be advantageous for Coinbase, as it highlighted custody fees as a potential revenue stream during an earnings call. Armstrong expressed his hope for more diversity in the crypto custody business in the long term.
Hot Take: Bitcoin ETF Approval Nears
Coinbase CEO Brian Armstrong is optimistic about the approval of a spot Bitcoin ETF. He believes that recent court rulings and the SEC’s need to provide new justifications indicate progress towards approval. While delays have occurred, analysts predict simultaneous approvals before January 10. Coinbase’s dominant role in custody services for Bitcoin ETFs has raised concerns about centralization, but Armstrong defends the trust placed in Coinbase. If approved, a Bitcoin ETF would be lucrative for Coinbase, and Armstrong hopes to see more custodians enter the market for greater diversity.
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