As competition for a spot Bitcoin ETF heats up, Coinbase could benefit most.
In the last month, a wave of major financial institutions have applied to offer spot Bitcoin (BTC -0.01%) exchange-traded funds (ETF) in a bid to bridge Wall Street with the original cryptocurrency. BlackRock (BLK 0.51%) made headlines on June 15 as the first firm to submit an application, followed by Fidelity, Ark Invest, Invesco, WisdomTree, and VanEck, all vying for a piece of the Bitcoin ETF market.
While the potential benefits for Bitcoin itself seem obvious, there is another player that stands to gain significantly from this race: Coinbase Global (COIN 0.79%).
The current situation
After receiving the applications, the Securities and Exchange Commission (SEC) wasted no time in reviewing them and promptly sent them back for revisions, deeming them “inadequate.” The main issue it identified was a lack of clarity on how the firms would minimize fraud and market manipulation, a key concern for the agency.
In response to the SEC’s feedback, each of the six firms expeditiously refiled their applications and tapped Coinbase as the partner for a shared surveillance agreement. By adding measures to monitor potential market manipulation, Coinbase will play a crucial role in enhancing market integrity and providing the necessary oversight asked for by the government.
Taking on a bigger role
Coinbase’s integral role in these applications is a testament to its position as a leader in the cryptocurrency industry. But the true opportunity for Coinbase lies not only in its surveillance capabilities but also in the additional services it will provide to the proposed fund issuers.