Coinbase: Key Player In New Era Of Bitcoin ETFs, Encourages Investor Caution

Crypto exchange Coinbase Inc. COIN, which acts as the primary custodian for 10 of the 13 currently available spot Bitcoin BTC/USD exchange-traded funds (ETFs), highlighted Tuesday its robust security measures.

What Happened: Coinbase brings "less exposure to custodial risks" for investors compared to directly owning a cryptocurrency, the firm's chief security officer Philip Martin said in an interview with CNBC.

Martin explained the extensive vetting process Coinbase underwent with ETF issuers, reflecting a commitment to security since the firm launched in 2012.

Blockchain addresses don't necessarily prove ownership or off-chain conditions, he added.

Also Read: Will Charles Schwab Eyeing Bitcoin ETF Be A Game-Changer For Retail Investors?

Regarding potential security risks with increased crypto interest due to ETFs, Martin highlighted the extensive due diligence done by ETF issuers.

Why It Matters: ETFs will open doors for previously hesitant investors, Martin says. They will promote "more stable risk management in market infrastructure," he added.

Anticipating a potential influx of new crypto investors, Martin stressed the importance of choosing reputable counterparties with a good track record.

He reiterated the importance of online security practices like two-factor authentication for first-time investors.

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Image: Coinbase