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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 institutional interest and massive corporate acceptance have mainly led to this buoyancy. Corporations’ increased efforts in allowing customers to hold bitcoin and other virtual coins in their online wallets and several central banks’ intention of rolling out digital currencies have been the wind under the wings of bitcoin.
Coinbase IPO: A Great Tailwind
The achievement in the bitcoin story has been the Coinbase IPO on the Nasdaq. Coinbase Global Inc. (COIN - Free Report) 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 Coinbase at $8 billion, as quoted on CNBC. And Coinbase is now valued at $85.8 billion.
Coinbase said recently that first-quarter 2021 revenues should tally about $1.8 billion, surpassing its revenues for all of 2020. Naturally, the IPO was grand with the Coinbase stock gaining about 31% on the first trading day on Apr 14. Shares opened at $381 a share, way higher than its $250 reference price. The company has said that its short-term performance is greatly dependent on crypto prices.
Regulatory Concerns Still Exist
Despite such humongous success noted lately, regulatory concerns are not going away for bitcoin. There have been repeated attempts in the past by ETF issuers to bring an exchange-traded-product on the cryptocurrency. But none received SEC’s nod. The SEC is seemingly looking for more proof of safety in this trade (read: 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.
Bottom Line
In 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 (SOXX - Free Report) and VanEck Vectors Semiconductor ETF (SMH - Free Report) . This is because mining of cryptocurrencies needs the usage of semiconductors. A 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 (BLOK - Free Report) . Blockchain technology is mandatory for bitcoin mining.
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Bitcoin ETFs Amid Coinbase IPO Success & Regulatory Concerns
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 institutional interest and massive corporate acceptance have mainly led to this buoyancy. Corporations’ increased efforts in allowing customers to hold bitcoin and other virtual coins in their online wallets and several central banks’ intention of rolling out digital currencies have been the wind under the wings of bitcoin.
Coinbase IPO: A Great Tailwind
The achievement in the bitcoin story has been the Coinbase IPO on the Nasdaq. Coinbase Global Inc. (COIN - Free Report) 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 Coinbase at $8 billion, as quoted on CNBC. And Coinbase is now valued at $85.8 billion.
Coinbase said recently that first-quarter 2021 revenues should tally about $1.8 billion, surpassing its revenues for all of 2020. Naturally, the IPO was grand with the Coinbase stock gaining about 31% on the first trading day on Apr 14. Shares opened at $381 a share, way higher than its $250 reference price. The company has said that its short-term performance is greatly dependent on crypto prices.
Regulatory Concerns Still Exist
Despite such humongous success noted lately, regulatory concerns are not going away for bitcoin. There have been repeated attempts in the past by ETF issuers to bring an exchange-traded-product on the cryptocurrency. But none received SEC’s nod. The SEC is seemingly looking for more proof of safety in this trade (read: 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.
Bottom Line
In 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 (SOXX - Free Report) and VanEck Vectors Semiconductor ETF (SMH - Free Report) . This is because mining of cryptocurrencies needs the usage of semiconductors. A 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 (BLOK - Free Report) . Blockchain technology is mandatory for bitcoin mining.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>