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Will Coinbase Lose its Crypto Spirit as COIN Stock Surges from BlackRock Involvement

Published July 4, 2023 1:01 PM
Omar Elorfaly
Published July 4, 2023 1:01 PM

Key Takeaways

  • Coinbase stock rose significantly after BlackRock’s ETF refiling 
  • The crypto exchange finds new business as a surveillance partner
  • Is Coinbase letting go of its “economic freedom” mission?

BlackRock re-filed its Bitcoin spot ETF request, this time adding a crucial detail that may increase its odds of being accepted by the SEC. In BlackRock’s new application, Coinbase was named as the company’s surveillance partner. As a result, Coinbase’s stock (COIN) saw a sudden surge in price.

However, reflecting on Coinbase’s initial mission for the crypto market, one must wonder: Is Coinbase still about the free market? Or, has the company sold its soul to Wall Street?

Critical Timing For Coinbase

Ever since BlackRock filed for a Bitcoin spot ETF the first time around, the market saw a sudden flare of optimism, which was reflected in the sudden increase in Bitcoin pricing. The same application encouraged numerous companies to file for their own ETFs, leading some to believe in the market once more, which led to more money being poured into Bitcoin and altcoins.

At the same time, Coinbase is facing a serious legal challenge posed by the US Securities and Exchange Commission in the form of a lawsuit that claims that the exchange has been trading in “unregistered securities.” Naturally, such a lawsuit threatened the survival of the biggest US-based exchange.

Now, the news broke out on BlackRock re-filing its ETF application, placing Coinbase as its surveillance partner. The move is aimed at satisfying the SEC, which believes that any spot ETF applications it had received earlier were inadequate , due to a lack of transparency and surveillance measures. 

Understandably, this comes as a saving grace for Coinbase, who otherwise would be facing a perilous future in the crypto market. Following the news of BlackRock’s new application, Coinbase’s stock (COIN) witnessed a 12% surge, now trading for north of $80  per share.

A Change Of Heart

On the financial/business side, Coinbase’s alliance with BlackRock presents a perfect opportunity for market survival, especially with the emergence of EDX Markets, a new crypto exchange backed by some of the country’s wealthiest corporations.

On the morality side, however, the decision to join hands with BlackRock and surrender to SEC rules poses a few questions. 

A quick look at Coinbase’s website can show anyone that the company’s mission statement is as follows:

“Our mission is to increase economic freedom in the world. Everyone deserves access to financial services that can help empower them to create a better life for themselves and their families.”

Granted, Coinbase is a for-profit organization that seeks to thrive further over time. But, its mission statement shows a sentiment of dream that crypto would be “by the people, for the people”.

After all, BlackRock is the biggest asset management company in the world, with over $4 trillion under its administration. With that in mind, one must wonder if Coinbase is supporting a future for crypto that is governed by the same powers that already rule the TradFi world.