BLOODBATH

If Bitcoin ETFs become a reality, it might not be good news for crypto exchanges like Coinbase. That’s because analysts think the fees these exchanges charge for transactions could go down, causing some challenges.
The crypto community is excitedly waiting for the potential approval of a Bitcoin exchange-traded fund (ETF) in the United States, with the value expected to be around $40,776. However, some experts caution that this approval might have not-so-good effects on cryptocurrency exchanges.
Spot Bitcoin ETF Approval: Potential Impact on Exchanges
Industry observers anticipate the trading debut of a spot Bitcoin ETF in early 2024, coinciding with Bitcoin’s upcoming block reward halving expected in April. Blockstream CEO Adam Back is optimistic, predicting this event could propel Bitcoin to $100,000.
Even more bullish, Bitcoin proponents like Jan3 CEO Samson Mow foresee the approval of a spot Bitcoin ETF in the U.S. driving Bitcoin to a staggering $1 million in the “days to weeks” following approval.
However, the outlook isn’t as rosy for centralized cryptocurrency exchanges, as noted by ETF Store president Nate Geraci and Bloomberg ETF analyst Eric Balchunas.
Once approved, Geraci believes a potential spot Bitcoin ETF in the U.S. could be a “bloodbath” for cryptocurrency exchanges. He explains that retail buyers and sellers of the spot Bitcoin ETF would benefit from institutional trade execution and lower commissions. In contrast, users of crypto exchanges would experience retail trade execution and commissions, prompting Geraci to emphasize the need for improvement in these areas to compete with a spot Bitcoin ETF.
Let’s check this 6mos after spot bitcoin ETFs launch…
Bet these tighten up pretty substantially. https://twitter.com/NateGeraci/status/1736561013720281499/photo/1
— Nate Geraci (@NateGeraci) Dec 18, 2023
Spot Bitcoin ETF and Its Potential Impact on Exchanges
Bloomberg ETF analyst Eric Balchunas points out a significant difference in trading costs between a spot Bitcoin ETF and popular exchanges. He highlights that trading a spot Bitcoin ETF would incur a 0.01% fee, which is the average cost for ETF trading. In contrast, exchanges like Coinbase charge higher trading costs, reaching up to 0.6%, depending on factors like the cryptocurrency, transaction size, and trading pairs.
If approved, the introduction of a spot Bitcoin ETF is expected to introduce more price competition in the crypto industry. This could redirect funds from exchanges that heavily invest in advertising, especially during events like the Super Bowl. Balchunas anticipates a shift in the industry landscape, stating that the launch of ETFs could mark the end of the era of high fees for some crypto exchanges.
He expressed this sentiment in an interview with industry journalist Laura Shin in September 2023, suggesting that the appeal of crypto exchanges, which profited significantly from their high fees, might decline with the advent of ETFs.
Coinbase, a major player in the exchange space, has traditionally earned a substantial portion of its revenue from transaction fees. In 2022, Coinbase generated $2.4 billion in transaction fees from both institutional and retail investors, constituting 77% of its total net revenue, which amounted to $3.1 billion. However, Coinbase has been actively diversifying its revenue streams, seeking to reduce its dependence on fees by offering additional income-generating services such as subscriptions.
⚠️Disclaimer
This content aims to enrich readers with information. Always conduct independent research and use discretionary funds before investing. All buying, selling, and crypto asset investment activities are the responsibility of the reader.
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Revenge trading #Revenge trading #trading
Revenge trading is a term that often echoes through the halls of the crypto trading community, and for good reason. This emotionally charged form of trading typically stems from a significant loss or a series of losses that trigger a trader’s urge to recoup their losses quickly. However, revenge trading is notorious for leading to further financial setbacks. This article delves into the reasons why revenge trading is detrimental and outlines strategies to avoid falling into its trap.
Why Avoid Revenge Trading?
Emotional Trading: One of the primary reasons revenge trading is harmful is that it is driven by emotion rather than logic and analysis. When a trader is in a mindset of revenge, their judgment becomes clouded, often leading to impulsive and irrational decisions. Emotional trading overrides the discipline and strategic thinking that are crucial for success in the volatile crypto markets.
Increased Losses: Revenge trading usually involves hastily making trades to recover losses without proper analysis or strategy. This impulsiveness often results in additional losses, compounding the initial financial setback. The market is unpredictable, and trying to guess its movements out of frustration or desperation typically leads to further missteps and deeper losses.
Strategies to Avoid Revenge TradingStep Back:
The first and most critical step in avoiding revenge trading is to step away from the market. Give yourself the time and space to cool down and regain your composure. Whether it takes a few hours, days, or even weeks, it is essential to detach yourself from the immediate urge to trade. Observe the market from a distance without engaging in any trading activities until you feel emotionally neutral and clear-headed.
Regain Clarity: Once you have distanced yourself from the emotional turmoil, your perspective on trading will become clearer. You’ll start to recognize genuine trading opportunities based on analysis rather than emotion. This clarity is crucial for making sound trading decisions that are rooted in strategy and reason.
Journal Your Trades: Maintaining a trading journal is a powerful tool for learning and improvement. By recording every trade, you can review and analyze your decisions, outcomes, and the reasons behind your trades. This practice helps you identify patterns, understand your mistakes, and refine your strategies over time, leading to more disciplined and effective trading.
Key Reminders for Traders
The Market Owes You Nothing: One of the hardest lessons for traders to learn is that the market is indifferent to individual losses or gains. The market does not owe you a recovery of your losses. Accepting this fact helps prevent the emotional response that leads to revenge trading.
Stay Disciplined:
Discipline is the cornerstone of successful trading. Avoid the temptation to jump back into the market too soon after a loss. By staying disciplined and patient, you can protect your assets and ensure that your trades are driven by strategy rather than emotion.
Conclusion
Revenge trading is a perilous path that many traders fall into, especially in the fast-paced and volatile world of crypto trading. By understanding the dangers of emotional trading and implementing strategies to maintain clarity and discipline, traders can avoid the pitfalls of revenge trading. Always remember to step back, regain your composure, and trade with a clear mind. Protect your assets and approach the market with a well-thought-out strategy, and over time, your trading performance will reflect these prudent practices.
#bloodbath #daytrading
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