Coinbase’s Chief Legal Officer, Paul Grewal, is optimistic that the U.S. Securities and Exchange Commission (SEC) will soon greenlight a spot Bitcoin (BTC) exchange-traded fund (ETF).
During a conversation with CNBC, Grewal conveyed a positive outlook on the likelihood of ETF applications gaining approval.
“I’m quite hopeful that these [ETF] applications will be granted, principally because the law dictates they should be approved,” he stated.
Grewal also referenced a recent legal decision that wasn’t in favor of the SEC. This verdict concluded that the SEC didn’t have a valid basis to reject Grayscale’s proposal to transition its GBTC Bitcoin fund into an ETF.
The decision by the SEC not to contest the recent court ruling suggests a potential trajectory towards greenlighting a Bitcoin-centric ETF in the near future.
Grewal expressed, “Given the stature and reputation of the firms coming forward with comprehensive proposals for these products, many of which are major players in the financial sector, I anticipate we’ll witness significant advancements soon.”
While Grewal emphasized the final say rests with the SEC, he is optimistic about a forthcoming Bitcoin ETF approval, especially in light of recent events.
The introduction of a Bitcoin ETF would offer investors an avenue to engage with Bitcoin without the necessity of direct acquisition from a crypto exchange.
For retail investors keen on Bitcoin exposure without the commitment to own the digital currency, this type of investment could present an especially appealing option.
Coinbase to Benefit From a Bitcoin ETF Approval
Coinbase is well-positioned to capitalize on the greenlighting of a Bitcoin ETF.
Being the premier cryptocurrency exchange in the U.S., its stock is a component in several portfolios tailored to offer investors a taste of the crypto market.
“We’re buoyed by the anticipation of numerous imminent developments, some of which are already in motion, that we believe will rejuvenate both investor and consumer enthusiasm for crypto,” conveyed a representative from Coinbase.
Furthermore, as noted, the crypto financial service provider Matrixport has projected a significant surge in Bitcoin’s value contingent on the introduction of a spot ETF in the marketplace.
Drawing parallels to the precious metals ETFs, which command a market capitalization near the $120 billion mark, Matrixport surmised the potential impact on Bitcoin. If 10-20% of those invested in precious metal ETFs decided to diversify their portfolios with a Bitcoin ETF as a safeguard against fiscal erosion and inflation, it could channel an additional $12 to $24 billion into the Bitcoin ETF.
Projecting the effects of such an inflow, Matrixport suggested, “Considering a scenario where Tether’s market cap surges by $24 billion, mirroring the possible ETF inflows, Bitcoin could see its price escalating to $42,000, which is a modest projection.”
Matrixport went further to speculate that, in the event of a more substantial inflow of $50 billion — inspired by a 1% portfolio allocation advice from Registered Investment Advisors (RIAs) — Bitcoin’s value might soar to a staggering $56,000.