Coinbase, the leading cryptocurrency exchange, saw its shares soar by up to 16% following a surveillance-sharing agreement with Cboe’s BZX Exchange, a development that has far-reaching implications for Bitcoin exchange-traded fund (ETF) applications.
Coinbase shares escalated to an all-time high of $92.15 on the back of this breakthrough agreement, signed on June 21, 2023. The agreement encompasses five of Coinbase’s spot Bitcoin ETF applications, aiming to bring enhanced transparency and reduce possibilities of market manipulation.
Previously, the cryptocurrency exchange had communicated its intent to engage in a surveillance-sharing agreement with Coinbase through its filings. The new accord marks a significant stride in this direction. The shared surveillance mechanism, termed as ‘Spot BTC SSA,’ will be operationalized by Coinbase, which represents a considerable segment of the US-based Bitcoin trading in USD.
Following this landmark agreement, amendments were lodged for all five of Cboe’s ETF applications, including those for Wise Origin, WisdomTree, VanEck, Invesco Galaxy, and ARK 21Shares.
A surveillance-sharing agreement, or SSA, is crucial in the contemporary ETF landscape. It is regarded as a vital measure for ETF applications, as emphasized by the U.S. Securities and Exchange Commission (SEC) over the years. The core objective of such an agreement is to curtail potential market manipulation, thereby fostering a secure and reliable investment ecosystem.
This noteworthy development extends beyond the Cboe-Coinbase alliance. Nasdaq, the securities exchange overseeing BlackRock’s Bitcoin ETF application, has also managed to secure an agreement with Coinbase, as indicated by a filing on June 29, 2023.
The integration of SSAs in the application process for Bitcoin ETFs signifies the evolving landscape of cryptocurrency investing. These strategic collaborations highlight the industry’s relentless pursuit of credibility, transparency, and security, aligning the volatile cryptocurrency market more closely with traditional financial markets.
Coinbase’s share surge demonstrates investors’ buoyant sentiments on the promising potential of Bitcoin ETFs. As strategic partnerships like these become more prevalent, cryptocurrency is likely to become an increasingly mainstream and reliable component of diversified investment portfolios.
