As the battle between the industry and regulators over Bitcoin ETFs nears its end, crypto trading has gotten a bump. According to Bloomberg, Coinbase Global gained 9.7% on Tuesday as a direct consequence of pending approval of the ETF.
The catalyst for Tuesday’s trading surge was exchange operator Cboe submitting amendments to an application to the Securities and Exchange Commission (SEC) for five Bitcoin ETFs. The news seemed a partial fulfillment of the prediction of former Securities and Exchage Commission (SEC) Chair Jay Clayton. In a Monday interview, Clayton said that crypto had grown mainstream with amazing speed. He predicted that Bitcoin ETFs might soon gain official approval.
Coinbase Trading Rides High on Pending ETF Approval
Tuesday’s news shook up the market. But Coinbase had been enjoying a rise in trading volume in the days leading up to Tuesday’s developments.
On June 30, Cboe refiled its application. This time naming Coinbase as the entity with which it will share responsibility for curbing abuses. On Monday, July 3, Coinbase shares were up 13%, according to Reuters.
In its 196-page amendment, Cboe makes a number of arguments to the SEC. Namely about why it no longer makes sense (if it ever did) to withhold approval of Bitcoin ETFs.
Some of the arguments are familiar from recent controversies involving asset managers such as Grayscale Investments. On Monday, that firm’s lawyer wrote to a federal judge seeking to reverse an adverse decision on Grayscale’s spot Bitcoin ETF. The attorney pointed out that the spot ETF carries less risk than ones that have already gotten off the ground.
Even so, Cboe’s amendment presents one of the most forceful arguments to date in this log-running tussle with the SEC.
Crypto Now Totally Mainstream
Cboe argues that the size of the CME Futures market, and its regulated character, should put to rest any worries. Especially any concerns about the potential for abuse in the trading of Bitcoin ETFs.
It points out that the size of the Bitcoin market has grown beyond recognition since the 2013, when the first OTC Bitcoin fund launched with only $60 million in value. And custodians would not provide fund custodial services for this type of asset.
Crypto trading is far more mainstream and many respected financial institutions have added crypto to their platforms, the amendment notes.
In the amendment, Cboe reiterates key points that Grayscale has made. Particularly with regard to the lack of consistency in regulators’ refusal to approve spot Bitcoin ETFs. Even while approving those that would trade as CME Bitcoin Futures and whose value would rest on Bitcoin itself rather than derivatives contracts.
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