For several months, Bitcoin ETFs have been some of the most followed news on the crypto market. In question, their potential role in the explosion in asset prices, starting with bitcoin. In fact, the possible arrival of a Bitcoin ETF on the market is seen as good news. But it seems, according to some experts, that it could thwart the ambitions of crypto exchanges. Here’s why.
In short
- The imminent approval of a Bitcoin ETF could boost the value of bitcoin, but pose challenges for crypto exchanges.
- According to expert Eric Balchunas, Bitcoin ETFs could offer a more profitable option than exchanges and could therefore affect their competitiveness.
- Reactions are mixed on social media, with some internet users believing that decentralized exchanges will still have their place in the market.
Approval of a Bitcoin ETF would affect crypto exchanges
Since Grayscale won its case against the SEC, the prospect of approval of a Bitcoin ETF appears to be getting closer. And the least we can say is that the crypto community is impatient about this.
Indeed, according to several experts, the approval of a Bitcoin ETF would give a boost to the valuation of bitcoin. A dynamic which should positively impact the crypto market, driven by the increased enthusiasm of institutional investors for bitcoin.
Obviously, crypto exchange platforms like Coinbase or Binance intend to benefit from this widespread renewed interest. But here it is: things might not really turn out the way they imagine.
According to Eric Balchunas, the approval of a Bitcoin exchange-traded fund (ETF) would not be good news for crypto exchanges. These, or at least the most important of them, would suffer significant repercussions if such a procedure were to flourish.
The reason is that purchasing ETFs could become a more profitable option for users. This basically means that exchanges, currently essential for crypto operations, could become options.
Eric Balchunas’ analysis is that there is, in this context, a risk that crypto exchange platforms will lose competitiveness. Because the classic methods of purchasing cryptos could be replaced by those of the Bitcoin ETF on the stock markets.
The threat is all the more certain as exchanges still practice inappropriate fee structures. A situation that could positively change in the case of the potential approval of a Bitcoin ETF.
“Within 3-4 years, you will be able to buy liquid and affordable Bitcoin ETFs, and it will be a game changer”, said the expert. This, by adding: “This is why we are warning crypto exchanges that this is a threat to their business. Coinbase and other exchanges charge significant fees per transaction.”
A perspective that makes you react
On X (formerly Twitter), Eric Balchunas’ analysis did not leave users indifferent. It provoked reactions from several of them, some of whom obviously do not agree with the expert’s opinion.
” I do not agree ; there will always be a place for decentralized exchanges. Of course, the results could be affected, but this is aimed at a different audience with a different level of risk,” said one of the X users.
Regardless, Eric Balchunas is confident in the approval of a Bitcoin ETF in the coming weeks. If necessary, everyone will be able to witness the relevance or otherwise of the analysis now issued.
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