Coinbase declares readiness for spot Bitcoin ETF approvals as BlackRock goes on the leaderboard

Coinbase Inc. has been critical in the multi-month race for Spot Bitcoin Exchange Trade Funds (ETFs). Its position as the largest crypto exchange in the US gives it an edge and serves as a key driver for its popularity. With such a helm, institutional players have identified it as a potential partner to bolster their filings in an attempt to convince the US Securities and Exchange Commission (SEC) for approval.

Also Read: Bitcoin Weekly Forecast: BTC coils up for one last buy opportunity before potential 2024 spot ETF rush

Coinbase is ready for spot ETF approvals

Coinbase has said that it is ready for spot BTC ETF approvals. This is after the US-based exchange reached Surveillance Sharing Agreements (SSA) with multiple filers. As part of the preparations, the platform has fortified and streamlined its systems to handle more trading volumes, increased liquidity, and general demand pressure.

This show of confidence comes as the proposed window is barely a week out, set to open on January 5, 2024.

SSA, short for Surveillance Sharing Agreement, is an arrangement between crypto exchanges and regulators or market surveillance providers such as the SEC to increase the crypto market's integrity as well as transparency. Among the ways this is achieved is the sharing of trading information. 

Operating a significant part of the US-based spot-trading platform for Bitcoin, Coinbase commands a sizable portion of US-based and USD-denominated Bitcoin trading.

It collaborates with the Chicago Board Options Exchange (CBOE) ETF applications, a partnership that started on June 21. Besides the CBOE, BlackRock and Fidelity also listed Coinbase as SSA in their iShares Bitcoin Trust as indicated on Nasdaq's 19b-4 form. 

If approved, BlackRock and CBOE would be able to share trade data with the commission, and book information, among other relevant market data. This would help put out or reduce the SEC's suspicion of market manipulation and allow it to confirm the lack thereof.

BlackRock goes on the leaderboard

Elsewhere, after multiple amendments and the recent capitulation to the SEC’s request for ETFs to do cash redemptions, BlackRock has become the first potential issuer to publicly complete SEC’s known requirements for spot bitcoin ETF approval, according to Nate Geraci, President of ETFStore. It comes after an update to its S-1, where it names Jane Street and JPMorgan as its authorized participants (APs) for its cash redemption transactions.

BlackRock S-1 

Citing ETF specialist Eric Balchunas on the development, “Looks we have our first horse that at the starting gate.”

With BlackRock’s heft in the market, this significantly increases the chances of approval. The naming of the APs, particularly where JPMorgan is concerned, is broadly ironic, considering the bank’s CEO Jamie Dimon recently said the only true use case for Bitcoin is for criminals, urging the government to ban it. In 2014, when Bitcoin price was at $816.20, Dimon said, “[Bitcoin] is a terrible store of value." The turn of events is a textbook illustration of how smart money operates.