With anticipation building that a Bitcoin ETF may be approved in the U.S., analysts have begun looking into the consequences this could have on centralized crypto exchanges. Proponents such as Adam Back of Blockstream believe this event could push BTC values to skyrocket, possibly as high as $100,000; whereas Jan3 CEO Samson Mow has gone so far as to suggest it could reach $1 million. Demonstrating this point, Nate Geraci stated on Twitter that if such is approved “it could result in a ‘bloodbath’ for cryptocurrency exchanges.” Emphasizing the need for exchanges to continue to innovate and improve their services, Geraci added that users will still face “retail trade execution and commissions” no matter the outcome. Eric Balchunas from the Bloomberg ETF posited that a spot Bitcoin ETF could drive fees to practically zero. One possible knock-on effect floated is that exchanges that currently allot substantial funds for marketing would divert profits directly back to users while simultaneously reducing fees. The crypto markets recently endured a turbulent episode where $130 long positions were extinguished, leading to automated executions – a situation blamed on extreme price fluctuations. It remains to be seen how exchanges handle now, and would continue to manage, the possibility of a spot Bitcoin ETF being approved. Both bullish and bearish predictions make the outcome even more uncertain, although risk management will likely be key to maintain stability whatever the consequence.
