Coinbase Shares Pump Over 30% After Wall Street Amends Bitcoin ETF Applications

In this Newsletter edition, we'll discuss the recent exciting developments surrounding Coinbase and its significant price surge. We'll also explore the company's potential role as a surveillance-sharing agreement (SSA) collaborator for upcoming bitcoin exchange-traded funds (ETFs).

Coinbase has experienced a remarkable surge in shares, skyrocketing over 30% in just one week. This impressive growth can be attributed to Nasdaq and Cboe, who have recently refiled spot bitcoin ETF applications on behalf of several fund managers. These updated applications highlight Coinbase as a potential SSA collaborator if the ETFs are approved.

Wall Street banks are evidently making their quick efforts to respond to concerns raised by the SEC. Last week, SEC had expressed worries about Cboe's initial filing, which lacked the identification of specific crypto-trading platforms that would aid in detecting fraud in the bitcoin markets.

In a similar vein, the SEC also raised similar concerns with Nasdaq. The SEC questioned Nasdaq regarding a recent filing made by BlackRock, a prominent investment management firm, for a spot bitcoin ETF (Exchange-Traded Fund).

Over the past few years, the SEC has rejected 100% of applications for spot bitcoin ETFs. Their rejections were based on the argument that these applications failed to meet the necessary standards for preventing fraudulent and manipulative practices, which are crucial for protecting investors.

As a result, the ETF industry is actively exploring potential solutions to address the SEC's concerns. Their objective is to develop robust measures that can effectively counter fraud and manipulation in the bitcoin markets, thus instilling confidence and ensuring the protection of investors.

As we discussed in our previous article about ETFs, we think it's unlikely that an ETF will be approved. Even though this amendment might make some people hopeful in the short term, we don't think it will be sufficient to get approval from the SEC.

While Coinbase enjoys its positive momentum in the market, it is also facing a lawsuit filed by the U.S. Securities and Exchange Commission (SEC). The SEC alleges that Coinbase violated several securities regulations and failed to register its staking-as-a-service program as required by securities laws.

Coinbase has responded by filing a motion to dismiss the case, stating that it has never been a securities exchange, broker, or clearing agency under the federal securities laws. The company emphasizes that although there are ongoing discussions in Congress regarding the regulation of digital currencies, no legislative measures have been implemented to grant the SEC retroactive authority over digital asset exchanges.

Interestingly, Coinbase's recent success is not unique in the current market landscape. Several other publicly traded companies have also experienced rising stock prices following the surge in the crypto market. Companies like Riot Platforms, Microstrategy, Cleanspark, Bitfarms, and more have all seen double-digit returns. However, it's worth noting that Coinbase has outperformed its competitors in terms of crypto-related shares gaining value in the past week.

But despite all of this, all of these stocks are still down significantly from their all-time highs, with CoinBase being down over 76% since it peaked in April 2021.

We would love to hear your thoughts on Coinbase's recent surge in shares and its potential role as an SSA collaborator for upcoming bitcoin ETFs. Feel free to share your opinions and join the discussion in the comments section below.