Coinbase, Robinhood shares rise as bitcoin ETF approval adds credibility to cryptocurrency industry
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Shares of Coinbase and Robinhood popped Thursday as traders bet the approval of bitcoin exchange-traded funds in the U.S. would give the cryptocurrency trading platforms a boost in demand.
Coinbase and Robinhood were both up 3.7% in premarket trading.
On Wednesday, the Securities and Exchange Commission approved rule changes that allow for the launching of bitcoin ETFs in the U.S. The news has been long awaited by investors in the crypto space as it is seen as lending more credibility to what has been a volatile industry and asset class.
«This is a monumental step for the crypto industry,» Coinbase CEO Brian Armstrong told CNBC's Andrew Ross Sorkin in an interview that aired Thursday. «There's 52 million Americans who have been using crypto over the past decade, and I think they've been waiting for some kind of acknowledgment from the government, and the SEC in particular, that this asset class is here to stay — and they finally got that.»
There is some concern that the advent of a spot bitcoin ETF in the U.S. could put pressure on Coinbase down the road — as it offers investors an easier way to invest in the cryptocurrency. But investors appear to be betting that it will raise interest in the crypto industry as a whole.
To be sure, Coinbase is a custodian of several of the ETFs that are slated to begin trading soon, meaning the company will generate fees from that service.
«We see the impact of a Bitcoin ETF as having both positive and risky elements for Coinbase, but given the appreciation of Coinbase's stock price, we see the risks as more relevant to shareholders,» JPMorgan analyst Kenneth Worthington wrote.
«On the positive side, we see Coinbase as the custodian of choice for Bitcoin ETFs, with
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