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Coinbase's Grewal Expresses Optimism for Approval of Bitcoin Spot ETFs

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Oct 25, 2023 at 09:20 am

Paul Grewal, the Chief Legal Officer at Coinbase, recently voiced his positive outlook in an interview with CNBC concerning the potential approval of bitcoin spot exchange-traded fund (ETF) applications by the U.S. Securities and Exchange Commission (SEC).

Grewal's optimism is based on his conviction that these applications are in alignment with established legal frameworks. He underscored that they are in compliance with well-established legal prerequisites, increasing the likelihood of their approval.

A spot bitcoin ETF represents a distinctive investment vehicle designed to track the real-time price of bitcoin itself, distinct from bitcoin futures. It presents investors with direct exposure to the world's leading digital cryptocurrency without the need to possess the underlying asset. Anticipation surrounding the approval of a spot bitcoin ETF gained momentum earlier this year when significant players in traditional finance, including BlackRock, submitted applications for spot ETFs to the SEC.

If a spot bitcoin ETF obtains regulatory approval, asset management firms would be responsible for procuring, holding, and securely storing digital assets on behalf of their clients. This structure closely mirrors the model employed by physically backed gold ETFs. This development is anticipated to drive up the prices of underlying cryptocurrencies, contributing positively to the overall crypto sector.

Matrixport, a cryptocurrency services provider, has provided projections indicating that the approval of the BlackRock ETF could lead to bitcoin's price surging to a range between $42,000 and $56,000. Such an optimistic price trend is expected to yield benefits for companies operating within the crypto space, including Coinbase and MicroStrategy, as well as mining companies like Marathon and Riot Blockchain.

Although Grewal refrained from speculating about the exact timeline for SEC approvals, he expressed his strong confidence in the matter. He emphasized the substantial number of applications submitted by major players in traditional finance for spot bitcoin ETFs, indicating that it is a matter of when, not if. He concluded by stating:

 "I firmly believe that these firms, with their comprehensive proposals for these products and services, are among the industry's leading players. This suggests that we can anticipate rapid progress in this field."

Read more: Global Client Appetite for Crypto Evident to BlackRock CEO Larry Fink

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