Bitcoin ETFs Amid Coinbase IPO Success & Regulatory Concerns
Zacks Investment Research | Apr 15, 2021 08:00AM ET
The price of Bitcoin has been going through the roof lately. The cryptocurrency’s recent journey has been stellar. It took less than a month to cross the difference of $20,000 in value as the cryptocurrency hit the $20,000-mark for the first time on Dec 16 and touched $40,000 on Jan 7. It has recently crossed the $64K level.
Greater COIN known as Coinbase, is a U.S. company that operates a cryptocurrency exchange platform without an official physical headquarter. Coinbase has soared in value in the past year alongside bitcoin and Ethereum.
The service now has 56 million users, up from 43 million at the end of 2020 and 32 million in 2019. In its last private financing round in 2018, investors valued at $85.8 billion .
Coinbase said recently that first-quarter 2021 revenues should tally about $1.8 billion, 10 Most Popular ETFs of This Year ).
The tussle between the U.S. Securities Exchange Commission and ETF issuers over product launch has been going on for about five years now. Several issuers have restructured their proposed products to receive SEC’s green signal but no efforts were of any use.
Most recently, Federal Reserve Chairman Jerome Powell showed skepticism regarding it. Per Powell, cryptocurrencies are good for speculation and these are yet to gain the status of payment mechanisms, per a CNBC article .
A few days ago, Reserve Bank of India (RBI) Governor Shaktikanta Das had mentioned the RBI has hesitations regarding cryptocurrencies. Isabel Schnabel, a board member with the European Central Bank (ECB), has also recently criticized bitcoin asserting the crypto asset “does not fulfill the basic properties of money .” Notably, the ECB is mulling over the launch of digital euro.
h3 Bottom Line/h3In short, we do not expect bitcoin to lose its strength in the near term, if such mainstream acceptance keeps coming. Yes, we may see corrections. Investors, who still fear extreme volatility in bitcoin, can invest in “Crypto Innovators.”
“The term 'Crypto Innovators' generally refers to companies that service and transact in the segment of the economy dealing with crypto assets and distributed ledger technology (e.g., blockchain technology),” per the Bitwise filing.
The sheer success of cryptocurrencies and Coinbase IPO should benefit semiconductor ETFs like iShares PHLX Semiconductor ETF hardware known as an ASIC (Application-Specific Integrated Circuit) is designed explicitly for mining bitcoin.
Also, if investors cannot lay their hands on a bitcoin ETF now, they can definitely familiarize themselves with the concept through blockchain ETFs like Amplify Transformational Data Sharing ETF Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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