The US Securities and Exchange commission approved eleven spot bitcoin ETFs after the market close on Wednesday. Coinbase (COIN) will serve as the custodian for a majority of the issuers that were approved.
Coinbase CFO Alesia Haas tells Yahoo Finance's Seana Smith that it was "a landmark day for crypto," but that "this is a long journey and this is just one step along the way," in the bid for crypto to gain more widespread acceptance.
So what is Coinbase doing to make sure investors' investments are safe? Haas says Coinbase has a "long history of safely storing assets for both our retail and institutional customers." Haas explains that the firm has a "qualified custodian... which means that we will be the underlying bitcoin custodian" for many of the ETFs that were approved. As part of their offering, Haas says the firm offers security, including cybersecurity.
Haas believes the spot bitcoin ETF approval will "invite trillions of dollars that were previously not able to access crypto assets and not able to access bitcoin" access to the asset class.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Stephanie Mikulich
Video transcript
SEANA SMITH: The SEC approving 11 spot bitcoin ETFs, a landmark decision for the industry. And crypto exchange Coinbase is playing a huge role, acting as the custodian for the majority of the applicants approved today. So we want to bring in Alesia Haas, the CFO of Coinbase.
Alesia, it's great to see you. Congratulations on the news here that we're getting in just the last hour. Put this in context for us for our viewers, how big of a moment is this for Coinbase?
ALESIA HAAS: Well, thanks for having me, Seana. So today was a landmark day for crypto. 10 years ago, the first application went in, and today we got 11 ETFs approved from the SEC, as you noted. And many of those did highlight Coinbase's extensive role in it.
So we're really proud to be part of this moment. We're proud to be a trusted partner to the industry and the primary custodian for 10 of the 13 applications so far. And we really believe that this moment will expand the pie. It will create a positive impact for the overall industry. And it just reflects the maturity of bitcoin, the maturity of the asset class and another stamp of approval. But this is a long journey. And this is just one step along the way.
SEANA SMITH: And going off of that, the maturity that you were just talking about of the industry right now, what do you think of the timing? Why does the timing today here make sense? It is a decision or it is a view here from the SEC that the industry has been waiting on now, like you just said, for 10 years.
ALESIA HAAS: Well, I think it's important to recognize that Grayscale has been an important partner at pushing this forward for years. And we're proud to have been their custodian since 2019. And we're really grateful to their efforts to move the SEC and clearing the way for today.
But there's also been important court cases along the way. And I want to just zoom out to the big picture here, which is we now have 52 million Americans who own crypto assets. And many of those started with bitcoin as their first asset. So this is a well-adopted asset class within the US system. And I think that this moment in history has just shown that the energy around crypto, the number of market participants, the number of institutions that wanted to gain access to this space has helped us get to today.
But there was an important case studies along the way and important market players who've been pushing and applying and pushing the door open for now 10 years.
SEANA SMITH: Alesia, Coinbase playing a very critical role here. Investors relying on you as a custodian to safekeep and keep their tokens here extremely safe. What are the top steps that you are taking in order to ensure that investors investments are safe on your platform?
ALESIA HAAS: We are proud of our long history of safely storing assets for both our retail and institutional customers. So we have a qualified custodian. And that is the product that we are partnering with many of these ETF providers, which means that we will be the underlying bitcoin custodian for the ETFs. So when these issuers issue the ETFs, they have to buy the spot currency. They then hold that in custody. And that is what we are providing.
So we enable security, cyber security, as well as then strong operational and legal protections for the assets that they store at our Coinbase custody.
SEANA SMITH: But, Alesia, just to that extent and digging in a little bit deeper, just the cybersecurity risk, that aspect of that, I think that is shaking a lot of investors confidence. A lot of investors have been a bit apprehensive of investing in crypto because of what we have seen play out over the last several years. So what are you-- at Coinbase, what can you do in order to restore some of that confidence within the industry?
ALESIA HAAS: So we're really proud to have been selected, as we pointed out, by 10 of these issuers. And they've gone through extensive due diligence on our platform to test our controls. But we're also proud that we haven't had any material losses or hacks of our platform where we've lost customer assets due to our protections. And that is due to our now 12-year history of storing assets on our platform. We invest extensively in our security team. But we also invest in our strong legal protections and our operational protections and our compliance to ensure that we are actively monitoring and assessing risk on our platform.
SEANA SMITH: Alesia, what do you think this is going to do to the price of bitcoin? We're just in positive territory here for the day, still just shy of 46,000. What do you think that upside looks like?
ALESIA HAAS: Oh, my goodness. We do not predict the price of these assets. What I will say is that we don't overindex on the short term. We are playing a very long game here. And while this is a monumental step forward for the industry, it's expected to have volatility.
And we prepare for volatility of all shapes and sizes on our platform. So this will give us the opportunity to invite trillions of dollars that were previously not able to access crypto assets and not able to access bitcoin that are stored with registered investment advisors in other funds. And now they are going to now have access to this asset class. So we think this will bring institutional volume to the asset. But in the short term, what that does to price, I can't say.
SEANA SMITH: Alesia, what about the prospect of what comes after this approval? Lots of talk when you take a look at investor sentiment right now that we might see some approval of other crypto products. How likely do you think that is? And any guess just in terms of the timing, what that could look like?
ALESIA HAAS: Oh, I cannot predict the timing. We couldn't predict this day specifically until just a few weeks ago when rumors started to really start to take some seeds there. But I think that what this shows is just the continued commitment of the overall crypto industry to march forward, to get things approved, to work hard, whether it's through the court systems, whether it's through the regulators, or the International stage. And I think this is just a continued momentum and legitimacy and opening up the crypto markets to millions and billions of people around the world.
SEANA SMITH: Alesia, going back to the confidence part of all this and the risk that is still associated with crypto just in general. And we were talking about it earlier on in the show, Julie and Josh were discussing, the one dissent that we did get from one SEC commissioner Caroline Crenshaw, saying that this puts us on a wayward path that could further sacrifice investor protection. What's your response to that?
ALESIA HAAS: I believe very strongly that crypto is the future of money. And this is going to introduce more people to crypto and eventually the crypto economy. We've been at this for a decade. And as I shared earlier, we now have 5% of the world owning crypto assets. Coinbase works very hard to ensure that we're protecting our customers. And we work very hard also to drive regulatory clarity.
It's something that we feel very passionately about that we do need regulatory clarity around the world. We're proud to say that now we have many, many of the countries bringing forth crypto legislation that brings that consumer protection. We have invested in consumer protection on our own platform and hope that the US brings that clarity to investors, so that they can have the confidence that we have in this asset class.
But today we are just proud of this moment to open up new flows into crypto, new flows into bitcoin. And we think it's a first step of many on their journey into the crypto economy.
SEANA SMITH: All right. Alesia Haas, thank you so much for taking the time to join us here, CFO of Coinbase. Thanks, Alesia, and congratulations.
ALESIA HAAS: Thank you.