In a notable development for the cryptocurrency market, Cboe Global Markets, a prominent exchange operator, has recently filed amended applications to list and trade shares of three spot bitcoin exchange-traded funds (ETFs). This move aims to strengthen market surveillance and regulatory compliance by incorporating surveillance-sharing agreements with Coinbase, a renowned crypto-trading platform. As the industry awaits regulatory approval, the potential implications of this partnership could have a significant effect on the crypto market, particularly in relation to Bitcoin.
Enhancing Market Surveillance
To address concerns related to fraudulent practices and protect investor interests, the US Securities and Exchange Commission (SEC) has consistently rejected numerous spot bitcoin ETF proposals in recent years. However, by establishing comprehensive surveillance-sharing agreements with regulated markets, exchanges can demonstrate their commitment to meeting the necessary standards.
The collaboration between Cboe and Coinbase seeks to fulfill these requirements, potentially paving the way for increased regulatory acceptance and, subsequently, wider adoption of Bitcoin-based ETFs.
According to Reuters, Coinbase garnered significant attention and market share when this story broke up. On Tuesday, the leading crypto exchange in the US showed a 9.8% gain at $89.15 per share. Notably, it also accounted for approximately half of the US dollar-Bitcoin trading volume in May, underscoring its influence within the industry.
The partnership with Cboe signifies an important step towards aligning the platform with regulatory standards and addressing the SEC’s concerns. This collaboration could strengthen the market’s trust in both Coinbase and Cboe, leading to increased investor confidence and potentially attracting more participants to the cryptocurrency ecosystem.
The BlackRock Factor
Another noteworthy development occurred when Nasdaq recently refiled an application with the SEC to list a spot bitcoin ETF by BlackRock, the world’s largest asset manager. This application included a surveillance-sharing agreement with Coinbase.
BlackRock’s involvement in the crypto market further displays the growing interest from institutional investors. As more established financial players enter the space, the perceived legitimacy and credibility of cryptocurrencies, particularly Bitcoin, may continue to increase.
Legal Challenges and Regulatory Scrutiny
While the partnership between Cboe and Coinbase holds promise, it is worth noting that the SEC has been actively monitoring and taking actions against crypto intermediaries. In a recent case, the SEC filed a lawsuit against Coinbase, alleging that the platform failed to register as an exchange and violated disclosure requirements aimed at protecting investors.
Along the way, the crypto exchange has pushed back against the lawsuit, arguing that the assets traded on its platform do not qualify as securities. The outcome of this legal battle could have broader implications for the regulatory landscape surrounding cryptocurrencies.
Potential Market Impact
Should the collaborative efforts between Cboe and Coinbase receive regulatory approval, it could mark a significant milestone for the crypto market, particularly in relation to Bitcoin. The introduction of Bitcoin-based ETFs backed by reputable exchanges and trading platforms like Cboe and Coinbase could attract a new wave of investors, including institutional players seeking exposure to the digital asset.
This increased accessibility and legitimacy could contribute to a surge in demand for Bitcoin, potentially driving up its price and market capitalization.
The partnership between Cboe and Coinbase in their pursuit of Bitcoin-based ETFs represents a significant development for the cryptocurrency market. By addressing regulatory concerns and strengthening market surveillance, this collaboration has the potential to enhance the credibility of Bitcoin and the broader crypto ecosystem.
As institutional players like BlackRock show interest in the market, the growing acceptance of cryptocurrencies could signal a broader shift in the financial landscape. Nonetheless, ongoing legal challenges and regulatory scrutiny remain crucial factors to monitor as the industry continues to evolve.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.