Coinbase Chief Legal Officer, Paul Grewal, is optimistic about the approval of a spot Bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC). In a recent interview with CNBC, Grewal expressed his belief that ETF applications will soon be approved.
“The recent court ruling against the SEC’s denial of Grayscale’s bid to convert its GBTC Bitcoin fund into an ETF indicates a potential path for the approval of a Bitcoin-related ETF in the coming months,” Grewal stated.
While acknowledging that the final decision rests with the SEC, Grewal emphasized that recent developments suggest the regulatory body is likely to approve a Bitcoin ETF soon.
Benefits of a Bitcoin ETF
A Bitcoin ETF would provide investors with an alternative method to gain exposure to Bitcoin without directly purchasing the digital asset from an exchange. This could be especially appealing to retail investors who are seeking to invest in Bitcoin without owning the underlying asset.
Coinbase, as the largest crypto exchange in the United States, stands to benefit from the approval of a Bitcoin ETF. The company’s common stock is included in portfolios designed to give investors exposure to cryptocurrencies.
Impact on Bitcoin Market
According to crypto financial services platform Matrixport, a spot ETF for Bitcoin could trigger a major rally in its price. Matrixport compared this scenario to precious metals ETFs, which have a market cap of around $120 billion. If 10-20% of precious metal ETF investors consider diversifying into a Bitcoin ETF as a hedge against monetary debasement and inflation, it could result in an inflow of $12 to $24 billion into the Bitcoin ETF. Additionally, if registered investment advisors (RIAs) allocate 1% to Bitcoin, it could lead to an influx of $50 billion, potentially driving the price of Bitcoin up to $56,000.
