On Tuesday, there was a rapid surge in both Coinbase Global Inc (NASDAQ:COIN) and Bitcoin (BTC/USD) prices, driven by an erroneous tweet from Cointelegraph falsely claiming the SEC's approval of BlackRock's spot Bitcoin ETF application.

Bitcoin's price saw a remarkable increase of over 10% in response to the misleading news, while Coinbase initiated Monday's trading session with an approximately 7% gain, surpassing the S&P's modest 0.6% opening.

However, the excitement was short-lived as BlackRock promptly refuted the rumors, clarifying that "the iShares Spot Bitcoin ETF application is still under review by the SEC." 

This statement erased a significant portion of the initial gains made by both Coinbase and Bitcoin.

As a reminder, Coinbase is slated to serve as the custodian for at least four Bitcoin ETFs and has been designated the surveillance-sharing exchange partner for nine.

The potential impact of successful ETF launches on Coinbase's profitability remains uncertain. While the company is a crucial service provider, it is not immediately evident how meaningful the positive effects on profit and loss (P&L) would be. 

Coinbase may earn custodial and prime brokerage fees, which, while necessary, could be relatively modest compared to trading revenues and interest income. 

Furthermore, the shift of institutional and retail traders from holding spot Bitcoin to choosing ETFs could offset any gains.

Price Action: COIN shares are down 3.94% at $74.41, and BTC is down 0.19% at $28,342.18 on the last check Wednesday.