(CTN News) – Crypto trading platforms Coinbase and Robinhood were lower Thursday as traders weighed the impact of the U.S. approval of bitcoin ETFs.
The price of Coinbase shares dropped more than 5%, while Robinhood shares dropped more than 3%.
In the wake of bitcoin’s drop from its high, both stocks experienced accelerated losses. As of April 2016, the price of cryptocurrencies has dropped from $49,000 to about $46,000 after reaching $49,000 for the first time in December 2021.
Earlier this week, the Securities and Exchange Commission approved rules allowing bitcoin ETFs to be marketed in the United States. In the crypto market, this news has been eagerly awaited because it lends credibility to an industry and asset class that has been volatile in recent years.
In an interview that aired on Thursday, Coinbase CEO Brian Armstrong stated that “this is a landmark development for the crypto industry.” Over the past decade, 52 million Americans have used crypto, and I believe they have been waiting for the government to acknowledge that this asset class is here to stay – and they have finally been granted that opportunity.
An upcoming spot bitcoin ETF in the U.S. could put pressure on Coinbase in the future, as it offers investors an easier means of investing in the cryptocurrency.
The JPMorgan analyst Kenneth Worthington wrote, “We view the impact of a Bitcoin ETF as both positive and risky for Coinbase, but in light of stock price appreciation, we see the risks as more relevant to shareholders.”
Despite these concerns, we see Coinbase as the custodian of choice for Bitcoin ETFs, with the firm hired to hold 8 of the 11 Bitcoin ETFs approved by the SEC, in addition to its surveillance sharing agreements,” Hirsch said. As a result of the approval of Bitcoin ETFs, we see a Bitcoin ETF, if particularly successful, as a competitor to Coinbase.”
The success of Coinbase in 2023 has been attributed to a strong performance. A significant increase of over 56% has been recorded by Robinhood over the past year.