BTC ETFs approval will definitely have an impact on the traditional financial system because there are traditional people who still do not believe in BTC and consider it as something fake, but approval of ETFs by the US government has also raised interest in the hearts of traditional people and now they also began to use it. Plus they don't have to rely on exchanges, and have to take full responsibility of their funds, means now they have some insurance of there funds as they are keeping there funds on platform approved by governments.

This will change the mindset of traditional people thus the traditional fiat system will also be impacted by it, people will tend to invest there money in BTC ETFs now, while before approval they don't consider it as a good investment even if they are aware of the good benefits of it.