Coinbase + ETFs = ?

Background: On 1/10/24, 11 Spot Bitcoin ETFs were approved by the SEC to be traded on the stock market.
Fund Custodian: A super trusted company to; hold, secure and keep records of the Bitcoin for these ETFs.
Remember: In short, a Bitcoin ETF is like buying a stock that owns Bitcoin. The company whose “Bitcoin stock” you’re buying has to have someone buy and hold the Bitcoin they’re buying for the ETF or fund. This is where Coinbase came in big…
Out of the 11 funds approved, Coinbase holds the Bitcoin for 8 of them. For a fee of course…
Coinbase charges a certain percentage of the amount of Bitcoin they must hold for these companies. The amount of Bitcoin the hold for a fund is referred to as ‘assets under custody’ or AUM if you ever see that.

Super Simple Example: Blackrock has a Spot Bitcoin ETF called IBIT. Let’s pretend it has never been traded, there’s 0 Bitcoin in it and you’re the first one to buy the “stock”.
The SEC approved IBIT.
IBIT is listed on the stock exchanges.
You buy $100 worth of IBIT
Blackrock takes your $100 and gives it to Coinbase.
Coinbase takes that $100 and buys Bitcoin.
Coinbase now holds this Bitcoin, in a separate account for Blackrock.
Coinbase charges a fee for holding this.
Bitcoin goes up 10%.
You sell your “share”
Blackrock tells Coinbase.
Coinbase Sells your shares and gets $110 in cash.
Coinbase sends Blackrock your cash (minus fees).
Blackrocks gives you your cash (minus fees).
\This is widely oversimplified and during this process, both Blackrock and Coinbase take fees out of your profits or losses.*

The other 3 custody agents are Gemini (a crypto company), Fidelity holds its own since it has a digital asset division, and BitGo (another crypto company).
As people buy and sell this “stock” or Bitcoin ETF, the company that’s selling these ETFs has to buy and sell Bitcoin for the people who own this. They buy and sell on Coinbase, which takes a fee for every transaction.
Coinbase earns fees from
1.Storing companies Bitcoin (Custody Fees)
2.Buying and selling the Bitcoin in the funds (transaction fees)

Interesting Points
Some view this as possibly bad for Coinbase. As the custody fees are low, and a bulk of revenue comes from retail trading. People fear they could eat into their own profits if retail crypto traders move from Coinbase, to stock exchanges buying ETFs instead.
This is an interesting point in the perspective of what happened in 2022 with short-seller Jim Chanos who (claimed Coinbase can only earn meaningful revenue from high transaction fees “fees for people buying and selling Bitcoin on Coinbase” Custody is a very important issue for Bitcoin and they are earning money by supplying the service of taking custody of people and companies Bitcoin.