A recent report by analyst Eric Balchunas suggested that the approval of a Bitcoin exchange-traded fund (ETF) in the United States could significantly impact major cryptocurrency exchanges. He suggests that traditional crypto purchases may be replaced by buying Bitcoin ETFs on stock markets within a few years. This shift could pose a threat to exchanges that do not adjust their fees to remain competitive.
In a recent podcast, Balchunas made his prediction on the historical trend of ETFs disrupting high fees in financial markets. He forecasts that this disruption will occur in the crypto space within the next five years. To simplify this, he points to the Gold ETF, which typically charges fees ranging from 0.35% to 0.40%, in stark contrast to some cryptocurrency exchanges that impose transaction fees as high as 1.5% after the initial promotional period.
The key advantage of ETFs, according to Balchunas, lies in their cost-effectiveness for consumers. When you invest in an ETF, the investment firm manages critical tasks such as secure storage of digital assets and optimizing tax efficiency. This, he believes, will make ETFs an attractive proposition for investors.
Balchunas remains confident in the possibility of the US Securities and Exchange Commission (SEC) approving a Bitcoin ETF, especially in light of recent developments that have increased the odds of approval.
Despite these statements, some argue that decentralized exchanges will continue to have their place, serving a specific audience with varying risk profiles. Nevertheless, Balchunas remains unchangeable in his belief in the impending significance of Bitcoin ETFs.
Recently, in a report by Todayq News on August 31, 2023, Balchunas believes there’s a higher chance of a Bitcoin ETF being approved by the end of 2023. They attribute this increased possibility to the legal win by Grayscale against U.S. regulators.
The favorable court ruling has led experts to update their estimates, with senior ETF analysts now putting the approval odds at 75%, up from 65%. Meanwhile, JP Morgan analyst Nikolaos Panigirtzoglou also predicts that the SEC’s stance on Bitcoin exchange-traded funds (ETFs) may change due to a recent court ruling against the SEC in a Grayscale Investments case.