BlackRock’s entry into the battle to develop a spot bitcoin ETF has sent Coinbase’s price soaring.
Since BlackRock’s unexpected spot bitcoin ETF registration, Coinbase’s stock price has been rampaging. Still, one analyst who follows the business warns that the euphoria fueling the gain may not last.
Since the US Securities and Exchange Commission launched its complaint against the exchange earlier this month, the price of the company’s shares has risen from roughly $52 per share on June 15 to $71 per share at the time of writing, erasing all losses.
The submission of exchange-traded fund (ETF) applications by several organisations, including asset management company WisdomTree and crypto-native enterprises like Bitwise, catalyses the current market uptick.
Mark Palmer, an analyst at Berenberg Capital Markets, warned clients that their excitement about COIN “may prove short-lived.”
Berenberg predicted the company’s revenues would drop if a stop and desist order were issued against Coinbase’s staking incentives programme. To allay regulatory worries about its staking programme, Coinbase must do so by July 4 in a number of US states.
Palmer thinks that the benefits of Coinbase’s cooperation with BlackRock are outweighed by the possibility of staking revenue losses.
However, the research needs to address the scope of Coinbase’s ETF partnerships. According to insiders, the company is playing a pivotal role in the ETF race by engaging in surveillance-sharing agreements and custodial ties with a number of issuers on their funds. It will act as BlackRock’s fund’s custodian as well.
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