Tag: Coinbase Global

Trump's Crypto-Friendly Stance: A Boon for Bitcoin and Beyond?

Posted on by The INO.com Team

As former President Donald Trump prepares to speak this week at the Bitcoin 2024 conference in Nashville, the big event is creating the most excitement in the crypto community. Bitcoin USD (BTC) has surged more than 9% over the past month and nearly 58% year-to-date, crossing the $66,500 mark and nearing its all-time high set earlier this year.

Moreover, this week, crypto investors are gearing up for several exciting developments, including the anticipated approvals from the Securities and Exchange Commission (SEC) for eight exchange-traded funds (ETFs) that hold Ethereum (ETH), the world’s second-largest cryptocurrency.

These ETFs can become staples in 401(k)s, IRAs, and pension plans, thereby boosting their mainstream acceptance. Notably, many money managers awaiting these approvals already manage ETFs that invest directly in Bitcoin, which sets a precedent for the new ether-focused funds.

Crypto-Friendly Stance From the Trump Administration

The cryptocurrency industry hopes the upcoming U.S. presidential election will usher in a softer approach to enforcement, potentially ending prolonged battles with Wall Street’s primary regulatory body. Former President Donald Trump has recently warmed up to the $2.5 trillion crypto industry and is hosting a Bitcoin-focused fundraiser on July 27.

While the Republican nominee was previously critical of cryptocurrencies, calling bitcoin a “scam,” Trump’s recent remarks have been more supportive, referring to cryptos as “amazing” in an interview with Bloomberg published last week. Legal experts predict a less aggressive stance on the digit-asset space from the SEC should he be elected.

According to data from the betting application Polymarket, there is a 62% chance of Donald Trump beating Kamala Harris. Following the assassination attempt on Trump last Saturday, July 20, the odds of him winning the U.S. presidential 2024 election have surged considerably.

Also, Trump chose crypto-friendly Sen. J.D. Vance (R-Ohio) as his vice-presidential candidate. In 2022, Vance held over $250,000 worth of Bitcoin.

Michael Selig, partner at Willkie Farr & Gallagher LLP, suggests that a Trump administration would likely seek to “reset and rethink the SEC’s crypto regulatory policy,” which would involve resolving ongoing enforcement actions and investigations initiated under the current administration.

Under President Joe Biden, the SEC, led by Chair Gary Gensler, has intensified its regulatory efforts, particularly following the collapse of crypto exchange FTX in 2022. The SEC has launched numerous enforcement cases against exchanges and broker-dealers for failing to register properly under securities laws.

Gensler maintains that most cryptocurrencies are securities and should, therefore, register with the agency, a stance that has led to several high-profile legal battles. While the SEC has settled some cases, litigation involving firms like Kraken, Coinbase Global, Inc. (COIN), and Binance is still tied up in court. Also, the SEC has closed some investigations, including one into Ethereum and another about BUSD, a Binance-branded crypto issued by New York-based Paxos.

“Remember, if Trump gets elected, the Republicans can immediately change who the chair is,” stated Austin Campbell, a blockchain consultant and adjunct professor at Columbia Business School. “What this means in practical terms is that many of these cases — which have been shotgunned out at highly variable degrees of quality and generating highly variable decisions that are increasing confusion — could all be settled instead of having to go forward.”

The GOP, in its 16-page party platform last week, explicitly criticizes the current administration’s approach to cryptocurrencies, stating, “Republicans will end Democrats’ unlawful and unAmerican Crypto crackdown.”

As the election approaches, the crypto community remains optimistic that a Trump administration could herald a new era of regulatory clarity and support for digital assets.

Bitcoin to Surge as Trump’s Chances of Winning Election Rise

Robert Kiyosaki, author of “Rich Dad Poor Dad,” predicts that Bitcoin could surge to $105,000 by August 2025 if Donald Trump wins the upcoming U.S. presidential 2024 election. Trump’s pro-crypto stance could drive up the prices of major cryptocurrencies, including Bitcoin and Ether, as well as other altcoins.

Additionally, regulatory clarity and support could pave the way for more financial products, such as ETFs and derivatives, further integrating cryptocurrencies into traditional financial markets.

Moreover, Bitcoin traders anticipate prices reaching up to $70,000 in the near term, driven by positive sentiment in the broader crypto sector ahead of the U.S. elections and a decrease in selling pressure from key wallets.

“The rebound in Bitcoin price shows the market has a more optimistic outlook in the near-term macro environment,” said Lucy Hu, senior analyst at Metalpha, in a message to CoinDesk. “The market was encouraged by Trump’s vice president pick, which indicates a more crypto-friendly administration and policies.”

“BTC could hover around the 120-day moving average, and the price may have the momentum to go up to $68k or even $70k, but we need to continue to monitor closely the Fed policies and implications of Mt Gox,” Lucy Hu added.

“A change in perspective on the digital assets industry in the US is creating expectations of more favorable policy toward Bitcoin and crypto as the elections look to capture single issue voters and special interest groups,” stated Nick Ruck, head of growth at BitU Protocol.

Ruck added, “There’s also less expected sell pressure in the long term as Mt Gox distributes funds to creditors.”

Bottom Line

With his pro-crypto stance, the potential of Trump winning the U.S. presidential 2024 elections could mark a significant shift in the regulatory landscape. A supportive regulatory environment could provide much-needed clarity for the crypto community, encouraging innovation and attracting more investors.

The anticipated SEC approvals for Ether ETFs further suggest a growing acceptance of digital assets in mainstream financial products like 401(k)s, IRAs, and pension plans, paving the way for broader adoption.

With Trump’s friendly crypto stance and the possibility of a more favorable regulatory environment, digital assets like Bitcoin and Ether could see a substantial surge in the near term. The potential changes underscore the importance of regulatory support in driving the growth and adoption of cryptocurrencies.

2024 Crypto Investments: Breakdown of Coinbase's MiFID License

Posted on by The INO.com Team

Coinbase Global, Inc. (COIN) claims to be mobilizing efforts to enhance economic liberty for more than a billion individuals worldwide. As part of this monumental undertaking, COIN is steadfastly focused on the creation and global expansion of trusted, fully compliant products and services.

In adhering to its "Go Broad, Go Deep" strategy, COIN is forging a pathway grounded in regulatory clarity, licensure, and registration to facilitate its international growth. Its Five-point Global Compliance Standard reinforces the company's pledge to make its products and services the most trustworthy in the market.

In its continuous bid for optimal regulatory compliance, COIN ensures that each entity fulfills its Five-point Global Compliance Standard before any license gets operationalized or any customer is served. This standard encompasses critical elements like Know Your Customer (KYC) processes, anti-money laundering measures, governance best practices, and ongoing monitoring and reporting procedures.

The application of this bespoke compliance standard and furthering strategic inputs have coalesced to yield significant progress for COIN in the past year. The company rapidly expanded, launching new operations in critical markets and initiating a range of derivative products. Yet, it begs the question – why is COIN so assertive in broadening its reach beyond American shores?

In the past year, COIN has aggressively pursued expansion globally, contending with increasing difficulties domestically. The firm is currently embroiled in a lawsuit instigated by the U.S. Securities and Exchange Commission, accusing it of securities law violations.

In October, the company chose Ireland as its primary regulatory base within the European Union in anticipation of impending crypto regulations denoted as the Markets in Crypto-Assets (MiCA). It also applied for a single MiCA license, which is expected to be granted by December 2024. Additionally, COIN recently procured a virtual asset service provider license from France, giving them clearance to offer crypto trading and custody services in the country.

Continuing its global expansion, COIN hopes to acquire a Cyprus-based entity with a European Union MiFID (Markets in Financial Instruments Directive) license. This acquisition would potentially widen access to its derivative products and extend services to qualified customers in selected EU countries, and it is contingent on regulatory approval. The closure of this deal is anticipated later in 2024.

COIN does not currently extend its crypto derivative offerings to the UK due to a January 2020 ban by the Financial Conduct Authority, which declared these products as "ill-suited" for retail consumers because of their inherent risks. However, in the U.S. and other international markets, COIN offers trading in bitcoin futures and ether futures, including "nano" ether futures and West Texas Intermediate crude oil futures.

The EU’s MiFID is one of the world’s most highly regarded licensing regimes regulating investment services and activities. MiFID has established a comprehensive single rulebook across the EU and is a central pillar in the EU’s Capital Markets Union strategy.

Could it be a critical battlefield for COIN?

In recent years, digital currencies have revolutionized the financial industry, challenging traditional economic systems by gaining appeal both as investment assets and transactional mediums. A particularly dynamic and swiftly growing segment within the cryptocurrency market is that of crypto derivatives, which experienced significant expansion and shows no signs of abating.

Derivatives are financial instruments that derive their value from the performance of an underlying asset. In traditional financial markets, derivatives are linked to assets like stocks, bonds, commodities, and fiat currencies. Within the cryptocurrency world, these financial instruments derive their value from digital assets like Bitcoin and Ethereum.

Crypto derivatives operate on principles similar to traditional derivatives, involving a contractual agreement between a buyer and a seller to exchange an underlying asset at a predetermined time and price. Unlike owning the actual asset, derivative traders do not possess the underlying cryptocurrency.

According to COIN, derivatives constitute over 75% of the global cryptocurrency market, highlighting their significant contribution to broadening the spectrum of investment possibilities in the Bitcoin sector.

This acquisition bodes the potential to usher in a substantial revenue source for the exchange in Europe. Impressively, regulators have given COIN the green light to provide derivative products to non-US retail consumers and qualified U.S. customers.

COIN marked its entry into the derivatives market in May with the initiation of an international derivatives exchange in Bermuda. Subsequently, it extended its provision of crypto derivatives to U.S. customers in November upon securing regulatory clearance from the National Futures Association.

However, despite its proactive strides, COIN is grappling with robust competition from entrenched market participants in the derivatives sector. Predominantly, COIN must face off with its primary adversary, Binance – a behemoth in the crypto-linked derivatives market, along with other players, including Bybit, OKX, and Deribit.

According to CoinGecko data, Binance recorded a whopping $61.39 billion in futures contract trading volume in just the preceding 24 hours – a stark contrast to COIN's much smaller volume of $299.48 million on its international derivatives exchange.

Even though a derivative's value depends on the performance of an underlying asset, index, or rate, it can significantly influence the market dynamics and investment strategies. Consequently, it can be an effective tool for capitalizing on market fluctuations and managing risk within the financial sphere.

Bottom Line

COIN, a leading cryptocurrency exchange with a whopping market cap of over $38 billion, is making strides with its MiFID pursuit – a move that bodes well for investor confidence. This demonstrates the firm’s growing ambition to expand its global footprint and compete with notable players in the market. Equally important, it underlines COIN's commitment to meet the stringent compliance standards that the EU upholds.

Furthermore, the MiFID pursuit could enhance COIN's reputation and boost its valuation as it aims to harness the potential of crypto derivatives in establishing a more equitable, accessible, efficient, and transparent financial system fortified by cryptocurrency.

A formative player in the financial sphere, COIN has spent the last 12 years curating its robust offerings to institutions such as hedge funds and high-frequency trading firms. This bid to benefit from larger transaction volumes these traders bring could revolutionize the company. Should COIN finalize the deal, this would mark the company's inaugural launch of derivatives trading in the EU.

Moreover, crypto derivatives play a pivotal role in enhancing market liquidity, acting as an essential tool for risk management in the volatile crypto market. They also offer traders opportunities to diversify investment portfolios across various crypto assets while employing advanced trading strategies like arbitrage and short-selling.

In November, derivative trading volumes on centralized exchanges saw an unprecedented surge, marking their highest levels since March 2023. The potential growth in derivatives trading is unequivocal, paving the way specifically for COIN to capitalize on its stellar reputation and appeal to institutional clients.

Moving forward, investors could keep an eye on COIN for better entry opportunities.

Why Coinbase (COIN) Might Be Your Best Crypto Investment in 2024

Posted on by The INO.com Team

Over recent years, Exchange Traded Funds (ETFs) have grown increasingly popular, presenting a diverse range of assets that include commodities, stocks, and indices. Within this mix, Bitcoin Spot ETFs offer regulated avenues for corporations and institutions to invest in cryptocurrency.

Bitcoin Spot ETFs have a specific goal: To track Bitcoin's value through the possession of the actual digital currency. In essence, these ETFs function by acquiring Bitcoin and subsequently issuing shares based on the underlying cryptocurrency's value. Therefore, Spot ETFs are engineered to afford investors direct access to Bitcoin’s price fluctuations.

However, the approval for Spot ETF is pending. On January 10, the U.S. Securities and Exchange Commission (SEC) will decide regarding the approval of Bitcoin Spot ETF applications that several firms have submitted.

As the world continually evolves, Coinbase Global, Inc. (COIN) goes far beyond mere adaptation – it spearheads change. COIN, a prestigious cryptocurrency exchange, offers trading, custody and other services for various digital assets. It is implementing savvy strategies and revamping its leadership team to prepare for what could be an industry-altering phenomenon: the sanctioning of Spot Bitcoin ETFs.

This bold move is motivated by a dynamic combination of anticipation and strategic readiness. COIN isn’t merely passively awaiting regulatory approval; it is actively orchestrating the environment for it.

Let’s see how…

COIN’s Leadership Shuffle and Strategic Readiness

The cryptocurrency sector is anticipated to extend custodial services to traditional financial institutions that have lodged applications for spot Bitcoin ETFs.

Recently, Aaron Schnarch departed from his role as CEO of Coinbase Custody, a trust company regulated by the New York Department of Financial Services and audited by Deloitte & Touche.

Mr. Schnarch left the company in August and was superseded by Rick Schonberg, according to the company representative. Mr. Schonberg has been part of COIN since 2021.

COIN is the preferred custodian among Bitcoin ETF contenders such as BlackRock, Franklin Templeton, and Grayscale Investments, based on Bloomberg Intelligence data.

For potential Spot Bitcoin ETF managers, custody services are crucial to their operation, as investors depend on these services to maintain the tokens securely. This need has prompted leading financial institutions to enlist COIN for these services on approval of their funds.

This shift in leadership signifies more than a mere change in staff – it represents a purposeful strategic shift. Schonberg, a seasoned pro with experience from Goldman Sachs, brings not just his expertise but also a significant vision – one where COIN doesn't merely participate in the Spot Bitcoin ETF market but aims to dominate it.

COIN's preparations for the anticipated approval of spot Bitcoin ETFs are comprehensive. They are creating a robust infrastructure capable of managing an expected increase in trading volume, liquidity, and overall market demand. Much like a dam built in anticipation of a flood, COIN eagerly awaits what may prove to be substantial market growth.

Anticipated Regulatory Decisions and Potential Market Implications

Let’s talk about the elephant in the room now…

The subject of pending decisions by the U.S. SEC on Bitcoin spot ETF approval cannot be overstated. It feels like the eager anticipation of rain during a prolonged drought – an endless skyward gaze with little reprieve.

However, recent proceedings indicate that the U.S. judiciary is gently nudging the SEC toward a decision, igniting hope for impending regulatory clarity. COIN appears well-equipped for such a monumental shift, utterly prepared to harness the resulting opportunities in what could be a watershed moment for the digital assets industry.

Speculations surrounding the approval of Spot Bitcoin ETFs have already sent tremors through the financial markets. The volatile ebb and flow of Bitcoin prices mirror the suspense typically reserved for a blockbuster thriller.

Amid this volatility, COIN remains positioned to emerge as a triumphant player, ready to capitalize on favorable market outcomes. Noteworthy entities like BlackRock, Franklin Templeton, and Grayscale Investments are already aligning themselves in anticipation of this financial revolution. The potential of Spot Bitcoin ETFs isn't merely significant; it's somewhat monumental, offering a bold forecast into the future of digital finance.

Should the SEC decide to reject Bitcoin ETFs, it wouldn't only be obstructing undertakings from cryptocurrency-focused entities but also major fund giants.

For instance…

BlackRock, one of these prominent fund organizations, is seeking approval for a spot Bitcoin ETF, selecting COIN as its dedicated crypto custodian. As the appointed crypto custodian, COIN will be entrusted with the responsibility of storing and protecting the Bitcoin assets that substantiate the ETF. They will also extend data handling and infrastructure support to BlackRock.

SEC’s approval could potentially propel COIN's revenue and prominence in the market while positively influencing the demand and value of Bitcoin. However, if the SEC were to repudiate the proposal, it could be detrimental to COIN, causing a significant setback in their financial growth as the custodial fees would not materialize.

Bottom Line

Spot ETFs would offer several advantages to investors, chiefly offering a simplistic, straightforward avenue to trade in Bitcoin, sidestepping the intricate tasks involved in purchasing and storing the cryptocurrency. Moreover, spot ETFs are regulated investment vehicles, heightening the level of transparency and oversight not commonly found in traditional Bitcoin investments.

However, they do not come without their inherent risk factors, with theft or loss of the Bitcoin held by the ETF standing at the forefront. As these underlying assets would be stored in a crypto wallet, there is an accompanying risk of security breaches and hacking. Moreover, spot ETFs remain susceptible to Bitcoin's price volatility and fluctuations.

The cryptocurrency market lost over $2 billion in 2022, buoyed by a broader move away from risky assets. It witnessed a drastic resurgence of about 157% in 2023 due to improved investor sentiment, partly fueled by optimism about imminent Bitcoin spot ETFs. This explosive volatility impacted COIN in both directions. After tumbling 86% in 2022, the stock experienced a meteoric rise of over 300% in value in 2023.

While this surge owes some credit to positive trends within the broader cryptocurrency market, it's crucial to acknowledge the significant strides COIN has achieved on its own – independent of influences from Bitcoin or overall crypto-market momentum.

Accompanying a shift in its leadership, COIN’s ambitious business diversification initiative seeks to evolve this crypto exchange into a comprehensive financial platform, valuably equipping it for future challenges and opportunities. Moreover, 2023 saw the company amplify its international expansion ventures.

Notable is COIN's unwavering commitment to regulatory transparency. It has adopted a proactive approach to compliance in every jurisdiction where it operates. Such thorough compliance positions COIN as a compelling prospect for institutional investors, enhancing its appeal as a likely top pick for further institutional investment.

COIN is not merely primed for the inauguration of Spot Bitcoin ETFs; it is all set to redefine the standards of the crypto exchange market. Emboldened with strategic transformations in leadership, significant improvements in systems, and a sharp focus on regulatory advancements, COIN is active in the market and catalyzing its transformations.

This is not a tale of a company gearing for change but one that’s ready to redefine the industry landscape. In this arena, COIN is not just a player, but it could be a game-changer.

COIN anticipates the introduction of spot bitcoin ETFs to add billions to the crypto market capitalization and ignite fresh avenues of asset-class investments. Upon approval, COIN could profit from its significant roles as a crypto custodian and trading associate for the ETF issuers. This development would bolster its standing in the crypto sector, stimulating growth in revenues and market shares. This could attract a more extensive base of customers and partners and enable a wider range of services.

However, COIN's involvement in the spot bitcoin ETF market, though presenting clear potential for profit, does not ensure a seamless path. It could be met with intensified competition from other cryptocurrency platforms and exchanges and face regulatory challenges and operational risks.

The market, with its inherent fluctuation and volatility, might also lead to uncertainty. The value and demand for Bitcoin and other digital assets are subject to factors like supply-demand dynamics, rates of adoption, innovation trends, market sentiment, and regulatory frameworks.

Operating as a custodian of ETFs, among other functions, represents a high-cost, low-profit business. Furthermore, there's a growing trend of companies cutting out the middleman – in this case, exchanges – and establishing direct access channels for their clients and themselves, often providing less expensive alternatives.

In the grand scheme of the crypto ecosystem, no single player has yet secured a dominant passthrough hold. Brokerages armed with more financial resources harbor the incentive to take the solitary route, which could potentially leave COIN in a position where brokerages were at the dawn of the 21st century.

Given the overall scenario, investors could wait for a better entry point in COIN.