“Barclay’s analyst predicts that the approval of a Bitcoin ETF would have a limited impact on Coinbase’s profit and loss statement, highlighting the company’s resilience and ability to adapt to changing market dynamics.”
On Tuesday, both Coinbase Global Inc (COIN) and Bitcoin (BTC/USD) experienced a rapid surge in prices due to an erroneous tweet from Cointelegraph. The tweet falsely claimed that the SEC had approved BlackRock’s spot Bitcoin ETF application. As a result, Bitcoin’s price saw a remarkable increase of over 10%, while Coinbase started Monday’s trading session with a gain of approximately 7%, surpassing the S&P’s modest 0.6% opening.
However, the excitement was short-lived as BlackRock promptly refuted the rumors, stating that “the iShares Spot Bitcoin ETF application is still under review by the SEC.” This statement caused both Coinbase and Bitcoin to lose a significant portion of their initial gains.
It is important to note that Coinbase is expected to serve as the custodian for at least four Bitcoin ETFs and has been designated as the surveillance-sharing exchange partner for nine. However, the potential impact of successful ETF launches on Coinbase’s profitability remains uncertain. While the company may earn custodial and prime brokerage fees, these revenues could be relatively modest compared to trading revenues and interest income. Additionally, if institutional and retail traders shift from holding spot Bitcoin to choosing ETFs, it could offset any gains.
As of the last check on Wednesday, COIN shares are down 3.94% at $74.41, and BTC is down 0.19% at $28,342.18.