Coinbase Stock Surges as Asset Managers Push for Spot Bitcoin ETFs
Coinbase Global Inc.’s stock experienced a significant surge in Monday’s trading session as asset managers continued to advocate for the launch of spot Bitcoin exchange-traded funds (ETFs). Several institutional managers, including BlackRock Inc., Fidelity, VanEck, and WisdomTree, have expressed their interest in launching spot Bitcoin ETFs in recent weeks. However, their applications were deemed inadequate by the Securities and Exchange Commission (SEC) due to a lack of information about their surveillance sharing partnership plans.
This setback initially caused Coinbase’s shares to end their winning streak on Friday. However, the stock soared on Monday, rising 11.7% during the session. The surge in Coinbase’s stock price was fueled by the company’s potential to play a pivotal role in the spot Bitcoin ETF market.
In a move to address the SEC’s concerns, the Chicago Board Options Exchange (Cboe) re-filed applications on behalf of several companies looking to create spot Bitcoin ETFs. The applications listed Coinbase as the exchange’s oversight sharing partner, highlighting its capability to provide valuable information in detecting and deterring fraud and market manipulation.
While the SEC has already approved Bitcoin futures ETFs, the approval of spot Bitcoin ETFs has yet to materialize, mainly due to concerns about market manipulation. However, there is optimism that the surveillance-sharing agreement between Coinbase and the Cboe could help appease regulators and pave the way for the launch of spot Bitcoin ETFs.
Coinbase’s recent rally extends the stock’s strong upward trajectory in recent weeks. Since June 12, Coinbase’s stock has surged 56%, coinciding with BlackRock’s application for a Bitcoin spot ETF. Over the past seven trading sessions, the stock has risen 37%. On Monday, Coinbase’s stock reached its highest close since March 21, ending the day at $79.93. A future finish above $83.99 would mark Coinbase’s highest close since August 17, 2022.
Despite the positive market sentiment surrounding Coinbase, some analysts are expressing concern about the stock’s meteoric rise. They highlight the potential negative impact of developments related to Coinbase’s crypto-staking program, which has attracted the attention of federal and state regulators.
The surge in Coinbase’s stock price also had a ripple effect on other crypto-related stocks. MicroStrategy Inc., a software company with substantial Bitcoin holdings, saw its shares rise 9.7%. Bitcoin miners Riot Blockchain Inc. and Marathon Digital Holdings Inc. experienced gains of 13.1% and 10.7%, respectively.
Overall, the push for spot Bitcoin ETFs by asset managers and the potential role Coinbase could play in this market have generated significant enthusiasm among investors. As discussions and negotiations with regulators continue, the outcome of the spot Bitcoin ETF applications remains uncertain. Nonetheless, Coinbase’s stock rally reflects the market’s optimism and anticipation for the potential approval of these ETFs.
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