Tuesday, February 27, 2024

Coinbase, Robinhood shares rise as bitcoin ETF approval adds credibility to cryptocurrency industry

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SAN ANSELMO, CALIFORNIA – JUNE 06: In this photo illustration, the Coinbase logo is displayed on a screen on June 06, 2023 in San Anselmo, California. The Securities And Exchange Commission has filed a lawsuit against cryptocurrency exchange Coinbase for allegedly violating securities laws by acting as an exchange, a broker and a clearing agency without registering with the Securities and Exchange Commission. (Photo Illustration by Justin Sullivan/Getty Images)

Justin Sullivan | Getty Images

Shares of Coinbase and Robinhood popped Thursday as traders bet the approval of bitcoin exchange-traded funds in the U.S. would give the cryptocurrency exchanges a boost in demand.

Coinbase traded 5.2% higher in the premarket. Robinhood rose 3.8%.

On Wednesday, the Securities and Exchange Commission approved rule changes that allow for the launching of bitcoin ETFs in the U.S. The news has been long awaited by investors in the crypto space as it is seen as lending more credibility to what has been a volatile industry and asset class.

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COIN pops

“This is a monumental step for the crypto industry,” Coinbase CEO Brian Armstrong told CNBC’s Andrew Ross Sorkin in an interview that aired Thursday. “There’s 52 million Americans who have been using crypto over the past decade, and I think they’ve been waiting for some kind of acknowledgment from the government, and the SEC in particular, that this asset class is here to stay — and they finally got that.”

To be sure, there is some concern that the advent of a spot bitcoin ETF in the U.S. could put pressure on Coinbase down the road — as it offers investors an easier way to invest in the cryptocurrency. But investors appear to be betting that it will raise interest to the crypto industry as a whole.

Coinbase is coming off a monster year, rallying 391.4% in 2023. Robinhood also soared more than 56% last year.

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