SEC Concerns Over Coinbase’s Involvement in Bitcoin ETF
The ongoing dispute between the SEC and Coinbase may cause the regulator to hesitate or even reconsider its decision on approving a spot Bitcoin ETF. Despite the possibility of approval, the SEC has consistently rejected all previous filings for a Bitcoin ETF over the past decade.
Last June, the SEC filed a lawsuit against Coinbase, accusing the company of acting as an unregistered exchange, broker-dealer, and clearinghouse. This breach of trust between the two institutions could become a significant obstacle in the approval process for a Bitcoin ETF.
Coinbase’s Potential Benefits if Approved
If the SEC grants approval for Bitcoin ETFs, Coinbase stands to gain significantly. According to Bloomberg’s Michael P. Regan, Coinbase would play a central role in various aspects of securities operations, including custody, trading execution, market surveillance, and lending.
ETF issuers like BlackRock have acknowledged their dependence on Coinbase and highlighted the SEC’s case against the crypto platform in their risk disclosures. Given this situation, past conflicts between Coinbase and the SEC could heavily influence the regulator’s upcoming decision.
Analysts Optimistic About Bitcoin ETF Approval
Despite doubts surrounding the approval process, analysts remain positive and expect early good news to arrive. Reports from Fox Business and hints from Bloomberg Intelligence analysts suggest that there is a chance for ETF approval as early as this week. However, most analysts believe that a Bitcoin ETF will be approved before the January 20, 2024 deadline.
If Bitcoin ETF trading begins in February or March 2024, market sentiment around Bitcoin price could experience an extended bullish wave leading up to the Bitcoin Halving event scheduled for Q2 of this year.
Hot Take: Uncertain Future for Coinbase’s Involvement in Bitcoin ETF
The ongoing conflict between Coinbase and the SEC raises concerns about the approval timeline for a spot Bitcoin ETF. While analysts remain optimistic, the breach of trust between Coinbase and the regulator could potentially delay or impact the decision. If approved, Coinbase would benefit greatly from its involvement in various key roles related to securities operations. However, the rift between Coinbase and the SEC may weigh heavily on the regulator’s final decision. Overall, the future of Coinbase’s role in a Bitcoin ETF remains uncertain.
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