While the crypto community is optimistic about spot Bitcoin ETFs and their potential effect on the Bitcoin price, several analysts are also predicting their negative effects on the crypto industry.
Nate Geraci, the President of ETF Store – an institutional ETF advisory firm – said that spot Bitcoin ETFs are going to be a “bloodbath” for centralized crypto exchanges, believing that investors will rather choose ETFs instead of trading Bitcoin on crypto exchanges charging high fees.
Geraci shared a post citing the fees collected on buying BTC from different exchanges and said that this commission will be tightened after the launch of spot Bitcoin ETFs.
While replying to Geraci, Eric Balchunas – a senior ETF Analyst at Bloomberg – said that ETFs will unveil the importance of one basis point. He also stated that the Bitcoin ETF will cost 0.01% to trade. This is “Gonna be a bloodbath for crypto exchanges,” said Geraci in response.
“Retail spot bitcoin ETF buyers & sellers will get benefit of underlying institutional trade execution & commissions,” said Geraci, adding that users on retail crypto exchanges will get retail trade execution & commissions, which will be required to be lowered in order to compete with ETF offerings.
Bloomberg ETF analyst Eric Balchunas emphasized that a spot Bitcoin ETF will cost 0.01% to trade, which is the average fee for ETF trading. In contrast, trading costs on exchanges like Coinbase reach 0.6%, depending on the cryptocurrency, transaction size, and trading pairs.
Once approved, a spot Bitcoin ETF will create more price competition in the crypto industry, bringing money back to investors from exchanges
Also Read: Bitcoin ETF Verdict Nears as Crypto World Awaits SEC Decision
