Coinbase has experienced a sudden spike in its stock price following reports that the U.S. SEC is on making a decision that can effect on the prices.
Bitcoin price started to grow after the news that BlackRock filed for a spot Bitcoin ETF. This also pushed the prices of other cryptocurrencies like ETH, BNB and XRP. Experts count this as a possible indicator that the SEC may changing its resistance against cryptocurrency-related ETFs.
Coinbase Stock Price Affected
Coinbase’s stock price soared after it was included in the newly filed spot bitcoin ETF applications of BlackRock and Fidelity. According to Coindesk. analysts at brokerage firm Bernstein believe that the chances of a US spot Bitcoin ETF being approved are quite high. They argue that the SEC’s opposition to such an ETF may no longer be tenable.
The analysts, led by Gautam Chhugani, predict the SEC is likely to approve a US spot bitcoin ETF in the near future. However, they note that the SEC has already approved futures-based bitcoin ETFs and leveraged futures ETFs. This approval is based on the fact that futures prices are derived from regulated exchanges such as the CME.
The SEC’s concern with a spot Bitcoin ETF is the lack of regulation of spot exchanges such as Coinbase. The SEC believes that spot prices are unreliable and susceptible to manipulation. Bernstein’s report highlights the case of Grayscale, a crypto asset manager that failed to convert its Grayscale Bitcoin Trust (GBTC) into an ETF. The case is currently before an appeals court after Grayscale challenged the SEC’s decision.
According to Bernstein analysts, the court seemed skeptical of the argument that futures prices are not derived from spot prices. Thus, the court may find it difficult to accept the approval of a futures-based ETF while rejecting a spot-based one.
“The court did not sound convinced that the futures price is not derived from the spot price, and thus to allow a futures-based ETF and not allow spot sounds like a difficult pill to swallow for the courts,”
Bernstein analysts Gautam Chhugani stated.
The analysts suggest that the SEC would prefer to introduce a regulated Bitcoin ETF backed by mainstream Wall Street participants and overseen by existing regulated exchanges. This approach would be preferable to the grayscale over-the-counter product that currently fills the institutional gap.
“SEC would rather bring in a regulated bitcoin ETF led by more mainstream Wall Street participants and with surveillance from existing regulated exchanges, than having to deal with a Grayscale OTC product filling the institutional gap.”
Do you think SEC will give crypto enthusiasts some positive move?