Bitcoin ETF Mania Is Obscuring Coinbase’s ‘Existential Overhang’

Sentiment around Coinbase Global Inc. is rising as the long-anticipated debut of an exchange-traded fund that invests directly in Bitcoin appears imminent. That’s fueling expectations for a widespread increase in demand, and apparently prompting some investors to disregard the uncertainty surrounding the largest US crypto exchange.

A spot Bitcoin ETF launch in the US could potentially bring in more business, but it may also push investors away from the platform, analysts argue. And the Securities and Exchange Commission lawsuit filed in the first half also continues to cloud Coinbase’s outlook.

Even with the overhang, the company’s financial performance is expected ...