Coinbase Global Inc (NASDAQ:COIN) is expected to soar on the Nasdaq exchange when US markets open on Tuesday, bolstered by an impressive rally on the world’s largest cryptocurrency and Coinbase’s primary trading asset Bitcoin.
As the premier US-regulated crypto exchange and the second largest behind Binance, Coinbase shares typically move in tandem with the bitcoin benchmark.
So it comes as no surprise that Coinbase shares are up 8% in pre-market trades following bitcoin’s stellar double-digit rally on Monday and sustained momentum this morning.
Though bitcoin has retraced from the 17-month high achieved in Asia trading hours, the BTC/USDT remains comfortably above $34,000, more than $6,000 higher than the 200-day trendline.
Why is bitcoin on a rip?
There are numerous catalysts for bitcoin’s recent rally.
Firstly, Grayscale Bitcoin Trust (GBTC) has won another round in its ongoing battle with the US Securities and Exchange Commission (SEC).
The DC Court of Appeals has ordered the SEC to review its previous decision to deny Grayscale's request to convert its bitcoin closed-ended trust into an exchange-traded fund (ETF).
This move could lead to bitcoin being traded on major exchanges, attracting significant institutional investment into the cryptocurrency market.
In related news, BlackRock's iShares Bitcoin Trust has secured a position with the Depository Trust & Clearing Corporation (DTCC), which manages trade clearances for Nasdaq, suggesting further optimism of an SEC approval in the coming weeks.
A win for Grayscale could provide encouragement for Coinbase’s own tussles with the US regulator.
In August, the SEC requested Coinbase to cease trading in everything except bitcoin, a move that would wipe out over 60% of Coinbase’s transaction revenues in an instant.
Earlier in the year, the SEC slapped Coinbase with a lawsuit on charges of securities law violations, with the regulator alleging that since at least 2019, Coinbase has made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities.
Coinbase shares were swapping for $82.85 with a market capitalisation of around $19.4 billion at the time of writing.