Industry analysts Nate Geraci, President of The ETF Store, and Eric Balchunas, a prominent Bloomberg Exchange Traded Fund (ETF) analyst, have recently spotlighted a potential game-changer in the crypto world: introducing a spot Bitcoin ETF in the United States.
According to their analysis, this development could bring benefits and notable challenges, particularly for established crypto exchanges such as Coinbase.
The duo’s insights, shared on X, paint a picture of a changing market dynamics. Geraci’s post highlighted the potential impact of a spot Bitcoin ETF, which he describes as a “bloodbath” for crypto exchanges.
Their argument hinges on transaction fees – a critical revenue stream for platforms like Coinbase.
Gonna be a bloodbath for crypto exchanges…
— Nate Geraci (@NateGeraci) December 18, 2023
The Fee Conundrum: Spot Bitcoin ETF Vs. Crypto Exchanges
According to Geraci’s analysis, a spot Bitcoin ETF would offer retail buyers and sellers “the advantage of institutional-grade trade execution” and commission rates.
This efficiency level is contrasted with the current model employed by most crypto exchanges, where retail users are subjected to relatively higher trade execution and commission fees. Geraci emphasizes the need for crypto exchanges to evolve their fee structures to remain competitive in this forthcoming landscape.
Balchunas further reinforces this viewpoint by pointing out the stark difference in trading costs between a spot Bitcoin ETF and crypto exchanges. He cites that trading a spot Bitcoin ETF could cost as little as 0.01%, a standard fee in the ETF industry.
This figure is substantially lower than the trading fees on exchanges like
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Author: Samuel Edyme
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