Brian Armstrong, the chief executive of America’s leading cryptocurrency exchange Coinbase, shared his thoughts on the impact the spot Bitcoin exchange-traded funds (ETFs) have had on his company and the crypto industry as a whole.
During last week’s Q4 earnings call, he said that ETFs were always considered a “win-win” for Coinbase and the company was starting to see that being played out. Coinbase won 8 out of 11 spot Bitcoin custody mandates from the funds’ issuers.
As a result, Coinbase Custody – the company’s offline crypto storage platform – manages about 90% of the $36 billion in Bitcoin ETF assets.
Bitcoin Is The Second-Largest ETF Commodity In The US, Surpassing Silver
Armstrong noted that the ETFs will unlock new pools of capital inflows into the crypto market, in which, Coinbase plays a key role. The CEO further emphasized that his firm is earning revenue, not just through the custody of crypto assets, but also from trading and financing.
Demand for Bitcoin is at its highest, and it is now the second-largest ETF commodity in the US, surpassing silver, added Armstrong. There has been a net inflow of over $4 billion into the spot Bitcoin ETFs. The funds are continuously breaking records.
Comparing Bitcoin’s performance to gold ETFs, which were launched in November 2004, he said the funds tracking the precious metal took a whole year to achieve $3 billion in net inflows. Meanwhile, Bitcoin ETFs were able to pass that figure in a matter of weeks.
“This is just the beginning,” he noted, before adding that some of the Bitcoin ETF issuers have already filed applications for funds tracking Ethereum (ETH) – the world’s second-largest cryptocurrency by market capitalization.
Coinbase has been named as the custodian for five of the eight ETH spot exchange-traded funds.
Coinbase Wants To Instill Regulatory Clarity For The Crypto Sector
Outlining Coinbase’s top priorities for this year, Armstrong said the company’s primary goal is to drive revenue, especially in two of its largest revenue streams – trading fees and stablecoins. The second priority is to “keep driving utility in crypto” and vouch for regulatory clarity for the industry.
He also addressed concerns about cannibalization, describing that for anyone worried about the factor, ETFs have been positive for the crypto market, which in turn has been additive for Coinbase.
Most importantly, he opined that every institution is now starting to hold crypto, and going into the future, the digital asset class will be a standard part of every diversified investment portfolio.
Armstrong noted that the financial system is officially adopting crypto, which is a good thing, and Coinbase is one of the most trusted partners in the industry. He reiterated that he has not seen any cannibalization since the Bitcoin spot ETFs were launched.
ETFs Are A “Totally Positive” Outcome For The Crypto Industry, Says Armstrong
He stressed that Coinbase is seeing “elevated engagement” and net inflows on both retail and institutional Q1 to date. This in his view makes the ETFs a “totally positive” outcome for the sector.
Furthermore, he said the more institutions that “get their feet wet” with crypto, whether it’s through ETFs or any other means, the better because they will eventually be using the assets in other ways – either holding it on their balance sheet, paying their vendors, or doing payroll.
Closing his statements, Armstrong said Coinbase intends for crypto to power “more and more” of the global GDP, and that the company has to get it done through every opportunity that is available to it.
“So, ETFs are incredibly positive for our business,” he concluded.
