Coinbase Optimistic About Approval of U.S. Bitcoin ETF, Expects Positive Developments in Crypto Market

Coinbase, the leading cryptocurrency exchange in the United States, is confident that a U.S. bitcoin exchange-traded fund (ETF) will soon be approved by the U.S. Securities and Exchange Commission (SEC). In an interview with CNBC, Paul Grewal, Coinbase’s chief legal officer, expressed his optimism about the approval, citing the strong legal basis for granting such applications.

Grewal highlighted a recent court ruling that dealt a major setback to the SEC, stating that the regulator had no grounds to deny Grayscale’s bid to convert its GBTC bitcoin fund into an ETF. The SEC chose not to appeal the ruling, indicating a potential path for the approval of a bitcoin-related ETF in the coming months.

The Coinbase executive emphasized that the firms presenting robust proposals for these products and services are reputable blue-chip players in the financial services industry. This suggests that progress towards approving a bitcoin ETF is imminent. Grewal did not provide a specific timeline for the approval but acknowledged that the final decision rests with the SEC.

A bitcoin ETF would offer investors a convenient way to gain exposure to bitcoin without directly purchasing the underlying asset from an exchange. This accessibility could be particularly appealing to retail investors seeking to participate in the crypto market. Coinbase, being the largest crypto exchange in the U.S., stands to benefit from the approval of a bitcoin ETF.

While Grayscale’s bid to convert GBTC into an ETF faces challenges due to a lawsuit filed by the New York Attorney General, Grewal remained positive about the approval of other bitcoin ETFs. He expressed confidence that the SEC would fulfill its responsibilities and apply the law neutrally to pending applications.

Bitcoin has experienced a stealthy comeback, rising approximately 72% year-to-date after significant declines in 2022. The market has witnessed increased investor demand for the digital currency, driven by expectations of the Federal Reserve ending its interest rate hikes and anticipation surrounding the upcoming bitcoin “halving” event, which will reduce rewards for miners and limit the coin’s supply.

While trading volumes have declined recently, Grewal attributed this to retail investors’ disinterest due to low volatility and the fallout from incidents involving industry players like FTX, BlockFi, and Three Arrows Capital. However, he expressed encouragement that bad actors in the space are being held accountable through criminal trials and regulatory actions.

In conclusion, Coinbase remains optimistic about the approval of a U.S. bitcoin ETF, anticipating positive developments in the crypto market. The company believes that the SEC will adhere to the law and grant approval to pending applications, which will bring back investor and consumer interest in cryptocurrencies.