Schwab-Backed Exchange May Help Spot Bitcoin ETF Approval’s Ophelia Snyder calls EDX Markets ‘a great idea from a product perspective.’

Reviewed by: Lisa Barr
Edited by: Daria Solovieva

Cryptocurrency exchange venture EDX Markets began trading June 20, backed by Charles Schwab, Citadel and Fidelity, and its activity could lead to the Securities and Exchange Commission warming to the idea of approving a spot bitcoin exchange-traded fund—provided it gains enough traction, according to market analysts.  

So far, SEC Chair Gary Gensler has been openly hostile toward the idea of spot bitcoin ETFs, accusing the entire crypto industry writ large of being rife with fraud.  

Still, there’s a flurry of companies waiting for approval to begin trading spot bitcoin ETFs, including BlackRock, which recently added Coinbase as a market surveillance-sharing partner, along with most other applicants). There are eight spot bitcoin ETF applications pending, with five filed in the last two weeks.  

Nate Geraci, ETF industry analyst and president of The ETF Store, said on CNBC recently that the SEC approving EDX Markets could lead to future spot bitcoin ETFs being approved.  

“If that can get enough volume, perhaps that could be the regulated market of significant size in the eyes of the SEC, and get them comfortable with approving a spot bitcoin ETF,” he noted.  

Potential Green Flag

Ophelia Snyder, co-founder and president of, also believes EDX’s focus on third-party custody of its bitcoin could be a green flag for the SEC. The agency is keen to see exchanges partner with a neutral custodian, like Coinbase, to hold their bitcoin.  

“I think it might work: It's actually a great idea from a product perspective,” Snyder said. “If they get material volumes, they could play a role in that, but just the fact that it exists doesn’t really do much.”  

She added that the SEC’s perspective on how significant a market’s size is can be vague, which makes it difficult to discern how much volume EDX might need to gain before it’s considered viable.  

“A lot of this hinges on a subjective interpretation of what a surveilled market of significant size is, and how the SEC chooses to interpret that,” Snyder explained. adding that she could see this new exchange changing the SEC’s mind “if EDX gets a bunch of volume, and becomes a major player, which I think is possible given their position.”  

Not everyone is as bullish: Bloomberg Intelligence Senior ETF Analyst Eric Balchunas told that he doesn’t think EDX Markets is enough to move the needle. He noted that EDX growth would “eventually” lead to more sway over the SEC.  

“It’s so new, I don’t really see [the SEC] being too moved by an exchange that doesn’t really have volume,” Balchunas added.  

Still, he noted there’s clearly a need for spot bitcoin ETFs in the U.S., especially since European, Canadian and Arab regulators have been more open to these vehicles for years.  

“They are recognizing that demand, that’s why the issuers are filing,” Balchunas said. Bloomberg Intelligence estimates there’s a 50% chance of BlackRock’s filing being approved.  

Samson Amore is a freelance business reporter based in Los Angeles. His work has appeared in the LA Business Journal, dot.LA and the Boston Globe.