Crypto exchange Coinbase believes that the US SEC is slowly warming up to Bitcoin derivative products as the market continues to expand with higher institutional participation.
With institutional demand for Bitcoin gathering pace, several global regulators have given a nod for Bitcoin ETF. However, the US SEC is dragging around the case with no clear stand on the matter. Nasdaq-listed public crypto exchange Coinbase Global Inc (NASDAQ: COIN) believes that the stance by the US on Bitcoin ETF is “softening”.
Thus, Coinbase adds that Bitcoin ETF approval by the SEC is likely by the end of 2021. This view of Coinbase appears in the forthcoming report for institutional players, reports Decrypt. The report notes:
“We believe that given clear public interest and favorable market developments, it is only a matter of time before the US SEC approves a Bitcoin ETF”.
In the report, Coinbase hasn’t mentioned any precise timeframe as to when the approval will happen. But it predicts that it will happen this year or at most by the next year of 2022. Top financial players in the US have been juggling around since late 2017 to introduce a Bitcoin ETF. However, the SEC has rejected it multiple times on the grounds that Bitcoin is subject to manipulation.
Earlier this month, Hester Pierce – the crypto-friendly SEC commissioner popular as a crypto mom – noted that the Bitcoin ETF is overdue. During a CNBC interview, when asked about the Bitcoin ETF approval she said:
“I thought that if we had applied our standards as we have applied them to other products, we would already have approved one or more of them. With each passing day, the rationale that we have used in the past for not approving seems to grow weaker.”
Growing Demand and Market Size of Bitcoin
In its report, Coinbase notes that there’s growing institutional demand with expanding market participation in Bitcoin. Coinbase also acknowledged that “at least a dozen applications to list a Bitcoin ETF have been knocked back”. However, it is confident that the bigger market for Bitcoin will help to allay SEC’s concerns.
Institutional giants like Fidelity and VanEck are waiting at the edge to approve the Bitcoin ETF. The approval could mean a massive influx of institutional funds in the crypto asset. Experts believe that it will also help to reduce the volatility of the world’s largest cryptocurrency. Apart from Fidelity, exchanges like Coinbase will also benefit a lot since it can offer custodial and other services to these companies. The report noted:
“These ETF issuers will leverage our custodial, staking, and trade-execution capabilities to provide the most competitive products to their clients”.
While the US awaits its first Bitcoin ETF, North American markets like Canada have already has these products running successfully.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.