Coinbase at the Center of Bitcoin ETF Draws Envy and Risks

6
Comment
Favorite

Coinbase at the Center of Bitcoin ETF Draws Envy and Risks

Bloomberg01-16

The debut of US spot-Bitcoin ETFs thrusts Coinbase Global Inc. into the center of crypto’s biggest mainstream moment to date. Yet what may seem like an enviable position also creates a welter of risks...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment

No comments yet

Most Discussed

7x24

All

Terms and Conditions·Privacy Policy

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email：uservice@ttm.financial

{"i18n":{"language":"en_US"},"data":{"share":"https://ttm.financial/m/news/2403304352?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2024-01-16 08:33","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2403304352","market":"us","top_or_hot":-1,"title":"Coinbase at the Center of Bitcoin ETF Draws Envy and Risks","media":"Bloomberg","content":"<div>\n<p>The debut of US spot-Bitcoin ETFs thrusts Coinbase Global Inc. into the center of crypto’s biggest mainstream moment to date. Yet what may seem like an enviable position also creates a welter of risks...</p>\n\n<a href=\"https://finance.yahoo.com/news/coinbase-center-bitcoin-etf-draws-150000126.html\">Source Link</a>\n\n</div>\n","source":"lsy1584095487587","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Coinbase at the Center of Bitcoin ETF Draws Envy and Risks</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCoinbase at the Center of Bitcoin ETF Draws Envy and Risks\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-01-16 08:33 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/coinbase-center-bitcoin-etf-draws-150000126.html><strong>Bloomberg</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The debut of US spot-Bitcoin ETFs thrusts Coinbase Global Inc. into the center of crypto’s biggest mainstream moment to date. Yet what may seem like an enviable position also creates a welter of risks...</p>\n\n<a href=\"https://finance.yahoo.com/news/coinbase-center-bitcoin-etf-draws-150000126.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4539","symbol_name":"次新股","start_time":0,"source_url":"https://finance.yahoo.com/news/coinbase-center-bitcoin-etf-draws-150000126.html","article_id":"2403304352","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2403304352","pubTimestamp":1705365182,"sourceInfo":{"source_id":"lsy1584095487587","name":"Bloomberg"},"weMediaInfo":null,"summary":"The debut of US spot-Bitcoin ETFs thrusts Coinbase Global Inc. into the center of crypto’s biggest mainstream moment to date. Yet what may seem like an enviable position also creates a welter of risks","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4539":"次新股","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","BK4023":"应用软件","LU2505996509.AUD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (AUDHDG) INC","BK4554":"元宇宙及AR概念","IBIT":"iShares Bitcoin Trust","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","BITB":"Bitwise Bitcoin ETF","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","BK4594":"比特币ETF概念","BK4567":"ESG概念","BK4534":"瑞士信贷持仓","COIN":"Coinbase Global, Inc.","LU1201861249.SGD":"Natixis Harris Associates US Equity PA SGD-H","BK4585":"ETF&股票定投概念","BK4533":"AQR资本管理(全球第二大对冲基金)","BITO":"ProShares Bitcoin ETF","LU0980610538.SGD":"Natixis Harris Associates US Equity RA SGD-H","FDN":"First Trust Dow Jones Internet I","BK4535":"淡马锡持仓","EZBC":"Franklin Bitcoin ETF","LU2430703095.HKD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4\" (HKD) INC","LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","LU1988902786.USD":"FULLERTON LUX FUNDS GLOBAL ABSOLUTE ALPHA \"I\" (USD) ACC","LU2430703178.SGD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (SGDHDG) INC","LU1670628061.USD":"M&G (LUX) NORTH AMERICAN DIVIDEND \"A\" (USD) INC","BK4550":"红杉资本持仓","BK4588":"碎股","LU2430703251.USD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4\" (USD) INC","BRRR":"Valkyrie Bitcoin Fund","BK4551":"寇图资本持仓","ARKB":"ARK 21Shares Bitcoin ETF","BTCO":"Invesco Galaxy Bitcoin ETF","BK4581":"高盛持仓","BTCW":"WisdomTree Bitcoin Fund","LU2592432038.USD":"WELLINGTON MULTI-ASSET HIGH INCOME \"A\" (USD) ACC","BLK":"贝莱德","BK4504":"桥水持仓","HODL":"VanEck Bitcoin Trust ETF","BK4135":"资产管理与托管银行","LU1670627923.USD":"M&G (LUX) NORTH AMERICAN DIVIDEND \"A\" (USD) ACC","LU2264538146.SGD":"Fullerton Lux Funds - Global Absolute Alpha A Acc SGD","FBTC":"Fidelity Wise Origin Bitcoin Fund","GBTC":"Grayscale Bitcoin Trust","BK4112":"金融交易所和数据","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","LU1861558580.USD":"日兴方舟颠覆性创新基金B","DEFI":"Hashdex Bitcoin ETF","LU2505996681.GBP":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (GBPHDG) INC"},"translate_title":"比特币交易所交易基金中心的比特币基地引发嫉妒和风险","themeId":"a391ff881f7f4c4698e552d7ec771594","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"EZBC":1,"SAI":1,"IBIT":1,"HODL":1,"GBTC":1,"FDN":1,"FBTC":1,"ARKB":1,"DEFI":1,"COIN":1,"BTCW":1,"BTCO":1,"BRRR":1,"BITB":1,"BITO":1,"BLK":0.9},"content_text":"The debut of US spot-Bitcoin ETFs thrusts Coinbase Global Inc. into the center of crypto’s biggest mainstream moment to date. Yet what may seem like an enviable position also creates a welter of risks for the company and its partners. The first exchange-traded funds investing directly in Bitcoin began trading last week after the US Securities and Exchange Commission finally approved applications from almost a dozen investment firms, including heavyweights such as BlackRock Inc. and Franklin Templeton. The launches, which follow a years-long industry push, were heralded as a pivotal development that will stoke broader adoption of the world’s biggest cryptocurrency. The majority of these ETF issuers will be dependent on Coinbase for the functioning of their funds in one way or the other, with the digital-asset exchange lined up to provide custodial, trading and lending services to BlackRock and others. Yet even as Coinbase stands to gain from Bitcoin’s leap into traditional markets, the arrangements highlight what some see as a potentially dangerous concentration of risk. Meanwhile, the emergence of a bevy of funds offering cut-rate fees on Bitcoin investment vehicles poses a separate threat to revenue at Coinbase’s core trading platform. “By design, our financial-market infrastructure is segregated into different roles,” David Schwed, chief operating officer at Halborn, a blockchain security firm, said. “When you have one entity that’s responsible for the entire life-cycle of the trade, I think that causes concerns.”Coinbase’s multiple roles are a key worry of the SEC itself, which is embroiled in a legal battle with the company after accusing it in June of running an unregistered exchange, broker-dealer and clearinghouse for tokens it deemed to be securities. Coinbase has disputed the allegations, claiming the SEC is overstepping its bounds.In announcing the approvals Wednesday, SEC Chair Gary Gensler pointedly noted that the agency isn’t endorsing any of the funds’ arrangements, nor does it “approve or endorse crypto trading platforms or intermediaries, which, for the most part, are non-compliant with the federal securities laws and often have conflicts of interest.”Coinbase, already the world’s largest crypto custodian, is the most-popular choice of custody provider among Bitcoin ETFs. But issuers also are flagging the potential that the company will have to restrict or curtail some services it provides, according to their risk disclosures. “There is definitely concentration risk because of so many firms using Coinbase as a crypto custodian,” said Dave Abner, principal at Dabner Capital Partners, an ETF consultancy. “Even if that turns out not to be a problem for the SEC, to me it seems like an unnecessary risk for investors and I’m surprised that a multi-custodian setup isn’t required of issuers, just to protect against unforeseen problems.”Alesia Haas, Coinbase’s chief financial officer, said the company works “diligently to avoid conflict of interests” and that the market structure in traditional securities may not be a fit for crypto. A spokesperson added that Coinbase’s custody business “is not at issue in our case with the SEC.”Coinbase is currently the only trading agent for BlackRock, which will buy and sell Bitcoin for its ETF through Coinbase Prime. And its lending business, a smaller part of the organization, is yet another critical cog in the Bitcoin ETF machine. Issuers such as BlackRock can borrow Bitcoin or cash from Coinbase for trades on a short-term basis. But the financing capacity of Coinbase — coming from the company’s own balance sheet — could potentially create a bottleneck for such trades. To be sure, BlackRock at least has multiple ways to manage trades, even if financing isn’t available.Brett Tejpaul, head of Coinbase Institutional, said Coinbase offers bundled services in custody, trading and financing to provide a seamless process. Clients who use different providers may end up introducing more risks, he added. While Coinbase’s shares rallied by nearly 400% last year along with the surge in Bitcoin, the new ETFs may only add 5% to 10% to the company’s revenue, according to a recent note from Mizuho. The analysts estimate that the ETFs may only add $25 million to $30 million in custody fees, as well as up to $210 million in incremental Bitcoin trading revenue on the platform. That’s a relative drop in the bucket compared with Coinbase’s total revenue of $2.15 billion in the nine months ended Sept. 30. Some current customers may start buying Bitcoin through ETFs instead of on Coinbase — which charges higher trading fees. Even if they don’t, Dan Dolev, Mizuho’s senior fintech analyst, says low ETF asset-management fees will likely drive fee compression across the entire space, including for Coinbase. Coinbase’s Haas said she doesn’t expect to see trading-fee pressure immediately following the arrival of Bitcoin ETFs, though the company could face fee compression in the long term. “We believe the spot ETFs will be additive to the crypto market and Coinbase,” said Greg Tusar, Coinbase’s head of institutional products. Custody fees are much lower than trading fees, and may yet go down further as competition heats up in that business. And there are alternatives to Coinbase: Fidelity Investments is using its digital-asset unit to safekeep Bitcoin for its ETF. Gemini, the crypto exchange co-founded by Cameron and Tyler Winklevoss, is also vying to play a role, and already landed VanEck Bitcoin Trust as a client. The ETFs are likely to diversify to use multiple custodians over time, as they wish to reduce their reliance on a single company — even if they aren’t ordered to do so. Haas is prepared for that potentiality. While Coinbase has been what she called a trusted choice for numerous other exchange-traded products and regulated funds, she acknowledged that issuers may choose to have a secondary custodian for “redundancy and diversification” as assets grow. She pointed out that ETF issuers in traditional financial markets typically have multiple custodians, though she expects Coinbase will retain a significant portion of the assets. For some, the fact that Coinbase is arguably more scrutinized, as a public company, than many others is an advantage — and that could attract more business longer term. Matt Hougan, chief investment officer at Bitwise, said his firm picked Coinbase for custody because the company is “the largest and most established.” “They want their customers to be as comfortable and confident trading on Coinbase as they would on Nasdaq,” said Campbell Harvey, a finance professor at Duke University.  For now, Coinbase is relishing its moment of victory. As the Bitcoin ETFs made their debut on Thursday, the mood was buoyant at the company’s sleek New York office, located in Hudson Yards on the west side of Manhattan. “None of us slept,” said Emilie Choi, Coinbase’s chief operating officer. “We were too excited.”Whether that buzz continues remains to be seen.","kind":"highlight","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"hasMoreComments":false,"newsSizeData":{"likeSize":6,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}