Crypto exchange Coinbase stands to benefit the most from a possible spot Bitcoin ETF approval. However, once approved, their involvement as an intermediary between the crypto market and the traditional stock market is a nuisance for the SEC. Bloomberg's Michael P. Regan believes that the royal battle between the largest crypto trading platform and the SEC could cause the smooth approval of the spot Bitcoin ETF to stall or possibly delay the process.
Coinbase's involvement could potentially delay the Bitcoin ETF
An ongoing conflict between the SEC and Coinbase could cause the regulator to stick to the potential timeline or, even worse, reconsider its decision. The approval of a spot Bitcoin ETF has been in the planning stages for ten years. However, the SEC has rejected all submitted documents each time.
Last June, the SEC sued Coinbase, alleging that the company acted as an exchange, broker-dealer and clearinghouse without registering with the agency for any of those roles.
The breach of trust between the two institutions could become a point of contention and a significant hurdle in the entire Bitcoin ETF approval process.
If the SEC grants approval, CoinBase will have the upper hand
There is no doubt that Coinbase will be on track to benefit significantly if the SEC licenses Bitcoin ETFs.
Regan says in the report with Bloomberg that Coinbase will be a central part of how securities operate, taking on several key functions including custody, trade execution, market surveillance and even lending.
Recently, ETF issuers, including BlackRock, have admitted that they are dependent on Coinbase and have pointed to the SEC's lawsuit against the crypto platform in their risk statements.
In such a scenario, this break with the past could greatly influence the SEC's upcoming decision.
Analysts remain positive about Bitcoin approval
Despite all doubts about the key approval, analysts have generally expressed positive tones and some even expect good news soon.
Reports from Fox Business and hints from Bloomberg Intelligence analysts suggest that there is a possibility that ETF approval could come as early as this week. However, general sentiment favors some Bitcoin ETF approval before the January 20, 2024 deadline.
If Bitcoin ETF trading begins within a few days, around February or March 2024, market sentiment around Bitcoin (BTC) price could set the stage for an extended bullish wave ahead of the Bitcoin halving scheduled for the second quarter of this year offer year.
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