Coinbase has delivered better-than-expected results for the fourth quarter of 2023, leading to a strong surge in the COIN stock. In a recent revelation, Coinbase chief Brian Armstrong made some interesting revelation of how its custodial solutions hold a huge majority of the Bitcoin ETF assets.
Coinbase Custody’s 90% of Bitcoin ETF Assets
In a notable development, Coinbase CEO Brian Armstrong has underscored the positive impact of traditional finance’s embrace of cryptocurrencies.
Armstrong revealed that Bitcoin Exchange-Traded Funds (ETFs) have emerged as the second-largest commodity ETFs in the United States, trailing only behind gold. Notably, Coinbase currently serves as the custodian for approximately 90% of the $37 billion worth of assets held within Bitcoin ETFs. This signals the platform’s pivotal role in facilitating institutional investment in the cryptocurrency market.
Coinbase Custody is a regulated entity and qualified custodian. However, this raises the question of whether should one entity hold this huge majority of Bitcoin ETF assets or not. Looking at the strong inflows into Bitcoin ETFs, US banks have also started showing interest in offering custodial solutions for cryptocurrencies. Chances are that since a majority of the US banking institutions operate under the purview of the SEC, they might receive approval in the coming time.
The latest report from Coinbase highlights the significant institutional inflows into the eleven current U.S. spot Bitcoin ETFs, totaling over $4.2 billion year-to-date. The report underscores that institutional investors’ adjustment to the new exchange-traded fund (ETF) environment is anticipated to uphold a strong foundation for Bitcoin’s market dynamics.
Plans Ahead for 2024
Brian Armstrong, CEO of Coinbase, outlined the company’s strategic priorities for 2024. These include expanding trading fee revenue through international growth and derivatives, enhancing utility in crypto through payment solutions (such as instant and free USDC transfers on Base), and evolving Coinbase Wallet into a comprehensive on-chain superapp.
Additionally, Coinbase aims to continue advocating for regulatory clarity in the crypto space through legal avenues, continue contributions to SuperPACs, and promoting favorable legislation in Washington, DC.
Armstrong emphasized Coinbase’s strong financial position and its commitment to compliance, which has proven advantageous compared to competitors. With these foundations in place, Coinbase is well-positioned to drive forward the adoption of crypto and contribute to the evolution of the global financial system.
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