Coinbase CEO Brian Armstrong on SEC ETF decision: We’ll see new pools of capital come into bitcoin

Coinbase CEO Brian Armstrong joins ‘Squawk Box’ to discuss the SEC’s approval of bitcoin ETFs, what it means for the investing community, what’s next for crypto, and more.

Most of those instruments. And I spoke with the company’s CEO Brian Armstrong last night. First on CNBC. This was right after the decision came out. And I asked him about the magnitude of this moment. This is a monumental step for the crypto industry and for

Coinbase to and the reason is that there’s 52 million Americans who have been using crypto over the past decade. And I think they’ve been hungry for some kind of acknowledgement from government and the SEC in particular, that this asset class is here to stay. And they finally got that it took a long

Time, I want to give a big shout out to greyscale, which is one of the firm’s that pursued this in the court to finally get it to fruition. But it finally happened. We had a number of ETFs approved today. And of course, it was a big day for

Coinbase, too, because we were named as the custodian and 10 out of 13 of these applications. So I think this means that over time, we’ll see new pools of capital come into Bitcoin. But more importantly, we had a huge regulatory milestone that showed the legitimizing power

Of this industry, how much does this impact your business? Well, we’re not sharing any kind of projections or revenue numbers, but I can tell you, this is very winwin. And the reason is that, yes, we’re gonna generate revenue as the custodian of 10

Out of 13 of these ETFs. And that’s great for these new pools of capital that want to come in and get exposure to Bitcoin. But our existing customers and our retail app where, you know, we’ve had all these people come in and get crypto today, they

Don’t just want exposure to Bitcoin. They also want to use Bitcoin for a variety of things. They want to use the other crypto assets out there for commerce, and staking and web three and the decentralized identity. And so, you know, this is the future of money we’re talking about here.

There are going to be people who have wanted to get access to the Bitcoin world to invest in Bitcoin, historically, the only real way they could do that was to use Coinbase, for example, to buy bitcoin and hold it. Now they’re going to be able to buy

A fidelity ETF for the grayscale ETF for the Black Rock ETF, how does that impact your business? I know you’re the custodian on one end, but it also means that those customers don’t necessarily have to get an account on Coinbase people who’ve been buying crypto for the last decade and using it to

52 million Americans. I mean, they already had an option, right? They could come to Coinbase. And they’re going to continue to do that. This ETF is really about unlocking new pools of capital that weren’t previously available. They didn’t have a way to get exposure to crypto. And so now

They can come in and get exposure to Bitcoin. That’s great new pools of capital come in. But that’s kind of the first step and people’s journey around crypto. Once they get a little bit of exposure to the asset class, they start to think

About, okay, well, how might this be used in different ways. And crypto is the future of money, it’s going to enable people to unlock all kinds of utility, which we can talk about if you want, but I think many of them will graduate from ETFs, to

Actually holding it directly and then starting to use it So in a blog post, you say that spot ether, a spot ether ETF can directly. quickly follow? How soon do you think that happens? And then beyond that, is it Solana? Is it you named the coin? I mean, how

Do you see this playing out? Yeah, well, obviously, that’s not entirely in our hands. So I can’t give you an exact date. But I do think that this will hopefully pave a way for other crypto assets to have their own ETFs. And then, you know, frankly, we should have index

Funds for crypto assets too, just like the s & p 500. You know, hopefully, maybe one day it’ll be the Coinbase 500, or something like that. And you can even imagine different index funds that is focused on you know, defy or or staking, or NF

T’s or different subsets of the crypto market. So this is a this is a really important new area of the financial markets. And I think that it’ll have all kinds of new products come to market after this. As you read through the decision today, was there anything that

Struck you about the words and maybe the word choice that the SEC used? And the reason I I’m even asking this question is, to me sort of reading through it. This was an approval, but almost an unenthusiastic one, it was one in which you could sort of

Feel a sense that they felt boxed in in large part by the lawsuit that you referenced earlier, from greyscale. And that decision, but left to their own devices, this is not something they would have done by themselves. And what that portends for the future.

Yeah, I mean, it does sound like it was kind of a grudging approval. So, you know, on the one hand, I’m glad we have an approval. It’s a recognition for the 52 million Americans who are excited about this and hopefully more in the future. But would it

Have been better if it had followed a more typical process if it had been held to the same standard as other ETFs? Absolutely. I mean, we have our own case with the SEC, for better or worse, you know, that’s not something that we

Ever really wanted to be in that situation. But if we, if we’re not going to get clear rules from the regulator, unfortunately, we may have to avail ourselves of the court to get case law created, the courts played a big role, as you mentioned in these ETFs. And then ultimately, I think we’re

Going to have to look to Congress to pass new laws, because ultimately, that’s where the regulators derive their authority. And I think it’s pretty clear at this point that we do need new laws on the book, to clarify some of these outstanding issues around what’s a commodity, what’s a security,

You know, the different types of market structures that could apply to crypto, does this change your relationship with the SEC, or how you might pursue lawsuits in the future, my hope is that we’ve had really great conversations and relationships with, you know, the SEC staff that they’re, you

Know, from one administration to the next, they’ve been great to work with. I think that we want to continue to engage with them so that this can be a trusted and regulated industry in the United States. It’s really a shame that we’ve had to kind of

Go to the courts to get clarity. And that’s what greyscale had to do in these ETF cases as well. That’s not the right way that rulemaking should take place under the Administrative Procedures Act. It’s not the way that we want to engage. We’ve

Shown up for dozens of meetings, we’ve really showed a good faith effort to provide every piece of information that they’ve ever asked for. And whenever we’ve kind of asked for clarity, we don’t get an answer back, we get a WELS. Notice. So that’s not

The way that that relationship should ideally work. And we’re committed to working with them indefinitely. What did you make of the the Twitter hack yesterday? I’m sure you you first saw the tweet or the Ex Post come up? And I don’t know, do you think it was real? What did you think?

You know, I don’t want to comment on that. It’s unfortunate that cybersecurity incidents are so prevalent out there, and they’ve happened to many people in the crypto industry too. So I have a lot of sympathy. You know, we all need to kind of make sure that our systems are secure. And it was

Unfortunate that that was a distraction from what was otherwise a really important announcement. Do you see flows? And you’ve been watching this, especially the last couple of months? Obviously, Bitcoin, the price of Bitcoin has been on a tear, in large part, arguably because of

Speculation that this day was going to come. What do you think that means and portends for the price of Bitcoin in the short term, and in the long term? Well, I try not to ever focus too much on the short term. The volumes today where I didn’t see any major price movements

Happen. But I think you’re right over the last two to three months, the market did move up quite a bit. And probably that was at least in part due to the anticipation of these approvals. So look, I’m optimistic on that. I think these approvals will

Bring in new pools of capital over the coming many years, I tried to take a long term perspective on this and we really just want to help a billion or more people hopefully benefit from this technology on coin basis platform and we’re

Not so much interested in the day to day movements of it 25 years from now, 50 years from now, where is this day going to stand in the historical context of, of business and money? Maybe right up there with when the first Bitcoin purchase

Happened, you know, for a piece of pizza, I think for 25,000 Bitcoin or something. I don’t know we’ll see. But there’s been a lot of historic moments along the way. And, you know, my hope is that we get many more of these. I’m not sure what the

Next one would be maybe maybe a central bank, holding Bitcoin, something like that would be a next milestone. We’ll see.