Coinbase’s stock (COIN) experienced a substantial surge on August 29 following reports of a federal judge’s ruling favoring Grayscale in its legal dispute with the U.S. Securities and Exchange Commission (SEC). By the end of the trading session, COIN reached $85.13 per share, marking a remarkable 15% increase compared to the previous day’s closing price. Coinbase, the largest U.S. cryptocurrency exchange, has been listed on Nasdaq since 2021.
Screenshot showing Coinbase stock’s price increase. Source: Coinbase
Legal Victory for Grayscale Boosts Sentiment
A federal court decision on August 29 deemed the SEC’s justification for rejecting Grayscale’s proposal to convert its Bitcoin trust into a traditional exchange-traded fund (ETF) inconsistent. This ruling, perceived positively by investors, has ignited hopes for the potential introduction of a Bitcoin ETF. Coinbase is being considered as a partner for sharing surveillance data and acting as a custodian for some ETF candidates.
Potential for Bitcoin ETF and Market Collaboration
If approved, these ETFs would enable the sharing of trading, clearing, and customer identification data between Coinbase and other participants. The collaborative effort seeks to mitigate market manipulation risks and enhance the security of Bitcoin storage supporting the fund shares.
Despite the absence of a spot Bitcoin ETF in the U.S. due to SEC hesitancy, investors are eager for investment tools offering direct exposure to Bitcoin. Leading asset manager BlackRock, along with other notable applicants, is seeking SEC approval. CEO Larry Fink acknowledged substantial client demand for cryptocurrency exposure.
Bitcoin’s Market Performance
At the time of writing, Bitcoin was trading at $27,982 per coin, reflecting a more than 7% increase in the past 24 hours, as reported by CoinMarketCap. However, the cryptocurrency’s value remains significantly lower, nearly 60%, compared to its peak of $69,044 in November 2021.
In summary, Coinbase’s stock witnessed a surge due to a positive legal verdict for Grayscale against the SEC. The ruling potentially paves the way for a Bitcoin ETF, while Coinbase’s role in data sharing and custody further supports the market’s collaborative efforts.