- The SEC vs. Coinbase legal battle has weighed on crypto stock prices, but the recent approval of Grayscale’s bitcoin ETF proposal boosted optimism and lifted shares of Coinbase and Grayscale.
- Coinbase stock jumped 6% after the Grayscale ruling, signaling renewed hopes for a spot bitcoin ETF that could expand the crypto investor base. This comes amid Coinbase’s feud with the SEC over crypto regulation.
- The outcome of Coinbase’s court case against the SEC, with a final filing due Tuesday, could determine the SEC’s authority over cryptocurrencies and shape the regulatory environment for exchanges.
The long-awaited approval of a bitcoin spot exchange-traded fund (ETF) could be a major turning point for cryptocurrency companies like Coinbase. On Monday, a federal appeals court formally upheld a ruling that forces the SEC to review Grayscale’s bitcoin ETF proposal. This decision lifted the share prices of both Grayscale and Coinbase, signaling renewed optimism about bitcoin ETF prospects.
Coinbase Stock Surges on Grayscale Ruling
Coinbase stock jumped 6% on Tuesday morning following the Grayscale ruling. The cryptocurrency exchange often mirrors broader crypto price movements, and a spot bitcoin ETF could significantly expand the crypto investor base. Along with Grayscale, other crypto-exposed stocks like MicroStrategy saw double-digit gains Tuesday. Still, shares remain far below 2022 highs amid the ongoing “crypto winter.”
The Backdrop: Coinbase vs. the SEC
The Grayscale decision comes amid an ongoing legal battle between Coinbase and the SEC. The SEC has faced criticism for its “regulation by enforcement” approach, targeting crypto firms after the FTX collapse. Coinbase argues the SEC is overstepping its authority, while the SEC maintains jurisdiction over crypto assets as securities. This feud has weighed on crypto stock prices despite a partial market rebound.
Coinbase’s Final Court Filing Due
Coinbase now has until Tuesday evening to submit its final response to the SEC’s rebuttal of its motion to dismiss. Back in August, Coinbase claimed the SEC’s lawsuit went beyond its power and that the assets in question weren’t securities. The SEC disagreed, arguing Coinbase facilitated transactions involving investment contracts. How this legal battle plays out could significantly impact the regulatory environment for crypto exchanges.
Conclusion
The Grayscale ETF ruling gave crypto stocks a boost, but major regulatory uncertainty remains. Still, the prospect of a spot bitcoin ETF could be a game-changer for the industry. All eyes are now on the ongoing Coinbase vs. SEC court battle, which could determine the SEC’s authority over cryptocurrencies. The outcome may dictate the regulatory climate that crypto firms operate in going forward.
