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Coinbase surges after Cboe names crypto exchange in bitcoin ETF application

Coinbase, the largest U.S. cryptocurrency platform, saw a 13% increase in its shares on July 3, 2023, after exchange operator Cboe announced that it was working with the crypto company in its effort to launch a spot bitcoin exchange-traded fund (ETF).

Cboe had refilled an application with the U.S. Securities and Exchange Commission (SEC) to launch a bitcoin ETF by asset manager Fidelity, and in that filing,

it named Coinbase as the crypto platform that would help the exchange police manipulation in the ETF.

Cboe sought to address SEC concerns that its original filing did not name the crypto-trading platforms that would help it detect fraud in the underlying bitcoin markets.

The SEC had also raised the same concerns with Nasdaq over a similar recent filing for a spot bitcoin ETF from BlackRock.

This essay will explore the impact of the Cboe’s selection of Coinbase, a leading cryptocurrency exchange, in its bitcoin ETF application.

In the following paragraphs, we will discuss the background of the application,

the resulting surge in Coinbase’s stock price, and the broader implications of this decision for the cryptocurrency market.

What is a spot bitcoin exchange-traded fund ?

Cryptocurrencies have been making headlines in recent years,

and one of the latest developments in this space is the application for a bitcoin exchange-traded fund (ETF) by the Chicago Board Options Exchange (Cboe).

A bitcoin exchange-traded fund is a financial product that allows investors to gain exposure to the price movements of bitcoin without actually owning the cryptocurrency itself.

This type of investment vehicle has been highly anticipated by both institutional and retail investors as it provides a regulated and convenient way to invest in bitcoin.

The Cboe, a major options exchange, has been at the forefront of the push for a bitcoin exchange-traded fund.

Their application process involves submitting a proposal to the Securities and Exchange Commission (SEC) for approval.

The SEC has never approved a spot bitcoin ETF, but several countries, including Brazil, Dubai, and Canada, have already approved similar ETFs.

The SEC has rejected dozens of spot bitcoin ETF applications in recent years, including one from Fidelity in January 2022,

citing inadequate filings that did not meet the standards designed to prevent fraudulent and manipulative practices and protect investors and the public interest.

the impact of the Cboe’s selection of Coinbase, in its bitcoin ETF application

The news of Cboe’s selection of Coinbase in its bitcoin exchange-traded fund application has had a positive impact on Coinbase’s stock price, which jumped 13% on Monday.

The market remains hopeful that Cboe’s second attempt at acquiring regulatory approval for a Bitcoin ETF will be successful,

despite the SEC’s rejection of roughly 30 applications to list a spot bitcoin ETF and no such product having received its stamp of approval.

Cboe sought to address SEC concerns that its original filing did not name the crypto-trading platforms that would help it detect fraud in the underlying bitcoin markets,

and the SEC had also raised the same concerns with Nasdaq over a similar recent filing for a spot bitcoin ETF from BlackRock.

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