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2 Stocks to Watch as Coinbase (COIN) Wins Major Trading Approval
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In what can be considered a major regulatory victory, Coinbase Global, Inc. (COIN - Free Report) announced on Wednesday that it had got approval to trade cryptocurrency futures to U.S. retail customers. As of yesterday, the crypto exchange was only able to offer these products to institutional customers.
However, Coinbase will now be able to engage with any eligible U.S. customer. The approval was granted by the National Futures Association (NFA), a self-regulatory organization designated by the Commodity Futures Trading Commission.
This news comes against the backdrop of the scathing legal battle raging between Coinbase and the U.S. Securities and Exchange Commission (SEC) on whether the business operated by the largest crypto exchange in the United States can be deemed legal.
If the SEC’s legal endeavors were to be successful, these could transform the crypto market by asserting the SEC's authority over the crypto industry, which has argued since its inception that tokens do not constitute securities and should not be regulated by the SEC. However, Coinbase getting approval from NFA boosts its chances of continuing to operate outside the SEC’s jurisdiction. "This is a critical milestone that reaffirms our commitment to operate a regulated and compliant business," Coinbase released in a statement.
This now opens up a largely untapped market for the firm. The global derivatives market constitutes almost 80% of the entire crypto market, and per CCData, a research firm, the trading volume for crypto derivatives globally in July amounted to $1.85 trillion. Now, with U.S. retail consumers in the mix, these numbers could compound in the future.
Coinbase, which currently carries a Zacks Rank #3 (Hold) and is part of the Zacks Securities and Exchangesindustry, has an expected earnings growth rate of 84.8% for the current year. The Zacks Consensus Estimate for its current-year earnings has improved by 31.3% over the past 60 days.
It may also be prudent to keep a tab on Coinbase’s peers and collaborators to understand the impact this news has on them. Primary among these would be Cboe Global Markets, Inc. (CBOE - Free Report) , which is collaborating with Coinbase in trying to launch a Bitcoin (BTC) exchange-traded fund. CBOE’s expected earnings growth rate for the current year is 4.2%. The Zacks Consensus Estimate for its current-year earnings has improved by 0.6% over the past 60 days. CBOE currently carries a Zacks Rank #3.
Another peer, CME Group Inc. (CME - Free Report) , operates as one of the world's largest futures exchanges and offers a wide range of derivatives contracts. It provides various solutions to invest in cryptocurrencies like Ethereum (ETH).
CME Group’s expected earnings growth rate for the current year is 13.6%. The Zacks Consensus Estimate for its current-year earnings has improved by 3.7% over the past 60 days. CME Group currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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2 Stocks to Watch as Coinbase (COIN) Wins Major Trading Approval
In what can be considered a major regulatory victory, Coinbase Global, Inc. (COIN - Free Report) announced on Wednesday that it had got approval to trade cryptocurrency futures to U.S. retail customers. As of yesterday, the crypto exchange was only able to offer these products to institutional customers.
However, Coinbase will now be able to engage with any eligible U.S. customer. The approval was granted by the National Futures Association (NFA), a self-regulatory organization designated by the Commodity Futures Trading Commission.
This news comes against the backdrop of the scathing legal battle raging between Coinbase and the U.S. Securities and Exchange Commission (SEC) on whether the business operated by the largest crypto exchange in the United States can be deemed legal.
If the SEC’s legal endeavors were to be successful, these could transform the crypto market by asserting the SEC's authority over the crypto industry, which has argued since its inception that tokens do not constitute securities and should not be regulated by the SEC. However, Coinbase getting approval from NFA boosts its chances of continuing to operate outside the SEC’s jurisdiction. "This is a critical milestone that reaffirms our commitment to operate a regulated and compliant business," Coinbase released in a statement.
This now opens up a largely untapped market for the firm. The global derivatives market constitutes almost 80% of the entire crypto market, and per CCData, a research firm, the trading volume for crypto derivatives globally in July amounted to $1.85 trillion. Now, with U.S. retail consumers in the mix, these numbers could compound in the future.
Coinbase, which currently carries a Zacks Rank #3 (Hold) and is part of the Zacks Securities and Exchangesindustry, has an expected earnings growth rate of 84.8% for the current year. The Zacks Consensus Estimate for its current-year earnings has improved by 31.3% over the past 60 days.
It may also be prudent to keep a tab on Coinbase’s peers and collaborators to understand the impact this news has on them. Primary among these would be Cboe Global Markets, Inc. (CBOE - Free Report) , which is collaborating with Coinbase in trying to launch a Bitcoin (BTC) exchange-traded fund. CBOE’s expected earnings growth rate for the current year is 4.2%. The Zacks Consensus Estimate for its current-year earnings has improved by 0.6% over the past 60 days. CBOE currently carries a Zacks Rank #3.
Another peer, CME Group Inc. (CME - Free Report) , operates as one of the world's largest futures exchanges and offers a wide range of derivatives contracts. It provides various solutions to invest in cryptocurrencies like Ethereum (ETH).
CME Group’s expected earnings growth rate for the current year is 13.6%. The Zacks Consensus Estimate for its current-year earnings has improved by 3.7% over the past 60 days. CME Group currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.