A spot Bitcoin ETF has become something of a holy grail for the crypto industry—despite repeated pushback by the SEC—but Coinbase CEO Brian Armstrong is “pretty optimistic” that one will be approved soon.

While stressing that he doesn’t have “proprietary or inside knowledge” on the matter, Armstrong told Decrypt that, “from everything I’ve read publicly […] it feels to me like we’re getting closer to an approval.”

“I’m pretty optimistic we’ll see something approved on an ETF next year,” he added.

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For starters, Armstrong pointed to the SEC’s failures in court. “The courts have pushed back on the reasons for denial of these ETFs and said, ‘Well, those aren't valid reasons—so if you have some other reason, let's hear it. Otherwise, you're gonna have to approve one of these things eventually.’”

In October, the U.S. Court of Appeals ordered the SEC to review digital asset manager Grayscale’s application to turn its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. While the SEC could still deny Grayscale’s application, it would need to find a new reason to do so that doesn’t relate to its previous line of argument, that the futures Bitcoin market is not closely connected enough to the spot market.

Last week, the SEC met with Grayscale to discuss its application.

Earlier this week, the SEC delayed the bids of Franklin Templeton and Hashdex’s ETF applications ahead of its January 1 decision deadline. Bloomberg analysts suggested the delay opens a “clear runway” for simultaneous ETF approvals, which they expect will take place before January 10.

Coinbase and ETF custody

Of the 13 prospective Bitcoin ETF issuers, 10 have chosen Coinbase Custody, as the custodian—including new entrant Pando Asset, which filed its application with the SEC yesterday.

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That means Coinbase could potentially be holding billions of dollars’ worth of Bitcoin on behalf of the funds—a level of centralization that’s raised eyebrows.

Armstrong pushed back at suggestions that having so much Bitcoin concentrated at one custodian is a risk.

“I think it’s a good endorsement of Coinbase and the trust that people are placing in that,” he told Decrypt, adding that Coinbase has stored “in the tens of billions” in crypto over the past decade. He pointed out that Fidelity plans to self-custody its Bitcoin; crypto exchange Gemini has also entered the fray, as the custodian for VanEck’s ETF application.

Approval of a spot Bitcoin ETF would be lucrative for Coinbase, which highlighted custody fees as a potential revenue stream during an earnings call earlier this month.

“My hope is that other custodians get built as well,” Armstrong said. “I’m not worried about it short term, but longer-term the crypto custody business is going to be an attractive business to a variety of companies, and we’ll get more diversity in the ecosystem.”

Edited by Stacy Elliott.

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