Tiger Research: Bitcoin ETF rise as traditional finance moves in and eats up market share from exchanges

Gate News message: A new report shows that as traditional financial institutions move aggressively into the cryptocurrency market, crypto exchanges are facing unprecedented competitive pressure. In its research on crypto trends across nine countries, Tiger Research notes that as multiple Asian countries prepare to approve spot Bitcoin ETFs, investors may gradually move away from existing trading platforms and toward familiar investment products offered by banks and securities firms.

The report says that global investors are putting billions of dollars into crypto ETFs, while exchanges are seeing layoffs, falling trading volumes, and declining share prices. The impact is particularly notable in Asian markets. South Korea currently has only five licensed exchanges; they were originally operated by technology startups, but traditional finance is now moving in—for example, securities giant Mirae Asset is set to complete its acquisition of the oldest Bitcoin platform in South Korea.

Tiger Research points out that about 16 million residents in South Korea have traded cryptocurrencies on domestic exchanges, but average daily trading volume and won-denominated deposits continue to decline. Investors are turning to the stock market or overseas platforms to seek higher returns. Japan and Hong Kong are also affected by high tax rates and strict regulation, which limits capital inflows.

The report emphasizes that traditional financial companies have an advantage in attracting new users. Investors can buy Bitcoin and high-market-cap altcoins through existing bank and securities apps, and exchanges will face survival pressure if they fail to provide services that banks cannot cover—such as DeFi and more choices of crypto assets. Tiger Research warns that unless exchanges enable ordinary users to understand decentralized finance and the altcoin ecosystem, these services will be difficult to realize value.

David Sacks, the U.S. government’s lead official for AI and crypto affairs, says banks and the crypto industry will gradually merge to form a unified digital asset ecosystem. A similar trend will also appear in Russia, where local lawmakers plan to mandate blocking overseas exchanges, forcing traders to use bank-operated platforms. If global exchanges cannot adapt quickly, they will face challenges of losing users and having market share eroded. (DL News)