Coinbase Expresses Confidence in U.S. Bitcoin ETF Approval Following SEC’s Legal Setback

Coinbase, a prominent cryptocurrency exchange, believes that the U.S. Securities and Exchange Commission (SEC) will approve a bitcoin exchange-traded fund (ETF), according to their Chief Legal Officer, Paul Grewal. Grewal expressed his optimism regarding ETF applications during an interview with CNBC, stating that they should be approved under the law. This confidence arises after a recent court ruling that dealt a setback to the SEC. The court found that the SEC had no legal grounds to deny Grayscale’s request to transform its GBTC bitcoin fund into an ETF. Notably, the SEC declined to appeal the ruling by a critical deadline, which has raised expectations that a bitcoin-related ETF will likely receive approval in the coming months. Grewal suggested that the firms presenting strong proposals for cryptocurrency ETFs include some of the most reputable names in the financial services industry. As a result, he believes it is only a matter of time before the SEC approves these ETFs. While Grewal didn’t specify when this will happen, he expressed confidence that the SEC would fulfil its responsibilities and likely approve a bitcoin ETF soon. He noted that the U.S. Court of Appeals had clarified that the SEC could not reject ETF applications on arbitrary or capricious grounds.

The SEC has not provided an official response to Grewal’s comments. If the SEC approves a bitcoin ETF, it could provide investors with an easier way to gain exposure to bitcoin without directly purchasing the cryptocurrency on an exchange. This could be particularly attractive to retail investors seeking exposure to bitcoin without the complexities of owning the underlying asset. Coinbase stands to benefit from an approved Bitcoin ETF, given its status as the largest cryptocurrency exchange in the United States. Many investment portfolios designed to offer crypto exposure include Coinbase stock. Despite the optimism surrounding approving bitcoin ETFs, Grayscale’s efforts to turn GBTC into an ETF face particular challenges. Grayscale’s parent company, Digital Currency Group, along with crypto exchange Gemini and its subsidiary Genesis, has been implicated in a lawsuit by the New York attorney general, alleging defrauding investors of over $1 billion. Nonetheless, Coinbase anticipates that more bitcoin ETFs will be approved, and Grewal believes the SEC will neutrally follow the law to address pending applications.