When Spot Bitcoin ETFs Are Approved in the US, Exchanges Will Face Challenges

  • Figures like Blockstream CEO Adam Back and Jan3 CEO Samson Mow have displayed bullish market trends, predicting significant price increases for Bitcoin after the approval of a spot BTC ETF.
  • However, according to ETF Store President Nate Geraci and Bloomberg ETF Analyst Eric Balchunas, the outlook is not as optimistic for centralized crypto exchanges.
  • Bloomberg ETF Analyst Eric Balchunas emphasized that a spot Bitcoin ETF would have a 0.01% transaction fee, pointing out that this amount is the average fee for ETF trading.

While the crypto world focuses on whether spot Bitcoin ETFs will be approved in the United States, ETF analysts are drawing attention to another issue.

Spot Bitcoin ETFs and Crypto Exchanges

Bitcoin-BTC

While the cryptocurrency community eagerly awaits the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the United States, analysts are discussing potential outcomes for leading exchanges like Coinbase. Simultaneously, the approval of a spot Bitcoin ETF and the Bitcoin halving in April 2024 could have significant effects on the crypto market.

Prominent figures in the crypto space, such as Blockstream CEO Adam Back and Jan3 CEO Samson Mow, have displayed bullish market trends, predicting significant price increases for Bitcoin after the approval of a spot BTC ETF. Some even suggested that the price of Bitcoin could reach $1 million within weeks of the ETF announcement.

However, ETF Store President Nate Geraci and Bloomberg ETF Analyst Eric Balchunas suggest that the outlook is not as optimistic for centralized crypto exchanges. Geraci, in his recent statement evaluating the potential approval of a spot Bitcoin ETF in the U.S., indicated that this could be a “bloodbath” for crypto exchanges. He emphasized that retail spot Bitcoin ETF buyers and sellers would gain advantages in terms of institutional trade execution and lower transaction fees.

In contrast, retail users on crypto exchanges will continue to experience retail trading execution and higher fees, emphasizing the need for exchanges to enhance their services to remain competitive. Bloomberg ETF Analyst Eric Balchunas emphasized that a spot Bitcoin ETF would have a 0.01% transaction fee, pointing out that this amount is the average fee for ETF trading. In return, major exchanges like Coinbase charge transaction fees of up to 0.6% depending on the type of cryptocurrency, transaction size, and trading pairs.

The introduction of a spot Bitcoin ETF is expected to intensify price competition within the crypto industry, diverting funds from exchanges that traditionally charge higher fees. Balchunas believes that this development could signify a change in the industry, especially for exchanges that heavily invest in advertising during events like the ‘Crypto Super Bowl.’

Challenges for Coinbase

Coinbase, historically reliant on transaction fees for the majority of its revenue, may face challenges in the face of this new landscape. In 2022, the platform generated $2.4 billion in transaction fees, constituting 77% of its total net revenue of $3.1 billion. Although Coinbase actively works to diversify its revenue sources to reduce dependency, the potential approval of a spot Bitcoin ETF adds a new layer of competition and underscores the need for exchanges to adapt to changing market dynamics.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.
spot_imgspot_imgspot_imgspot_img

Latest News

Litecoin’s Critical Moment: Will LTC Surpass the $94 Resistance Level?

Litecoin (LTC), the cryptocurrency often dubbed “silver to...

Bitcoin (BTC) Poised for 2024 Surge, Predicts Analyst PlanB: Key Insights into Upcoming Bull Market

Analysts are closely monitoring Bitcoin's trajectory, with significant...

Maximize Your Returns: Strategic $100 Investment Plan for Bitcoin (BTC) Success

Starting with just $100, anyone can tap into...

Institutional Investors Shift Focus from Ethereum (ETH) to Bitcoin (BTC) and These 6 Altcoins

Crypto asset investment products have seen a significant...
spot_imgspot_imgspot_imgspot_img

PRO Analysis

Ethereum Whale Sells After Long Hold, Cashes Out $171 Million – ETH Market Impact Analysis

A significant Ethereum whale has initiated profit-taking, signaling...

Live Update: Bank Nifty (BANKNIFTY) Share Prices for May 20, 2024 – In-Depth Analysis and Market Trends

```html Today, the Bank Nifty witnessed significant trading activity,...

Bitcoin (BTC) Market Turmoil: Expert Analysis Uncovers Dramatic Sentiment Shifts

Bitcoin's recent market performance has been nothing short of...
Lucien Renard
Lucien Renardhttps://en.coinotag.com/
Lucien Renard is a 24-year-old writer specializing in cryptocurrency analysis and price action. With a focus on technical analysis, Lucien provides valuable insights into market trends and potential opportunities for investors.
spot_imgspot_imgspot_imgspot_img

Litecoin’s Critical Moment: Will LTC Surpass the $94 Resistance Level?

Litecoin (LTC), the cryptocurrency often dubbed “silver to Bitcoin’s gold,” has left investors scratching their heads this week. After a... Recent fluctuations have...

Bitcoin (BTC) Poised for 2024 Surge, Predicts Analyst PlanB: Key Insights into Upcoming Bull Market

Analysts are closely monitoring Bitcoin's trajectory, with significant insights from the renowned analyst PlanB. PlanB compares the current Bitcoin market conditions to its...

Expert Trader Peter Brandt Debunks ‘Bitcoin Is Dead’ Myth, Challenges Peter Schiff’s BTC Claims

The recent 9.3% rise in the price of Bitcoin, which pushed it over $67,000 per BTC by the end of the week, has...