As the possibility of a spot Bitcoin exchange-traded fund (ETF) approval in the United States looms, there are differing opinions within the crypto community regarding the impact on self-custody. Trezor Bitcoin analyst Josef Tětek argues that ETFs could lead people away from self-custody. However, industry observers and experts seem to disagree, emphasizing that the two approaches do not necessarily compete with each other.
A spot Bitcoin ETF is an investment product that tracks BTC’s price by holding actual Bitcoin, allowing investors to trade BTC through traditional brokerage accounts. On the other hand, self-custodial solutions involve individuals holding the private keys to directly own Bitcoin.
Executives and analysts in the industry largely disagree with Tětek’s perspective. Jan3 CEO Samson Mow suggests that ETFs are suitable for funds and institutional investors unable to hold the underlying asset. He anticipates that institutions might adapt their mandates over time to hold the actual Bitcoin. While some retail investors may use ETFs for tax efficiency, Mow believes that holding real Bitcoin is preferable.
David Gerard, author of “Attack of the 50 Foot Blockchain,” concurs, stating that holding keys is for serious Bitcoin enthusiasts or cautious traders. He sees no direct conflict between ETFs and self-custody, as ETFs treat Bitcoin as a dollar derivative to attract more dollars.
Leah Wald, CEO of Valkyrie, a spot Bitcoin ETF applicant, also views it as a matter of preference. She notes that some investors may prefer self-custody, while others seek access to Bitcoin via an ETF, which alleviates the burdens associated with self-custody.
Bloomberg ETF analyst Eric Balchunas compares Bitcoin to gold, noting that some prefer physically holding gold bars, while others opt for exposure through ETFs. Balchunas acknowledges that he doesn’t self-custody Bitcoin due to concerns about forgetting keys, echoing the sentiment that many people prefer the convenience of ETFs.
Třetek had previously expressed concerns that spot Bitcoin ETFs could deviate from the original vision of Bitcoin’s creator, Satoshi Nakamoto, by potentially introducing systemic risks. However, the majority of industry experts see ETFs as a complementary option, serving as a bridge solution for legacy finance to adapt to the evolving Bitcoin landscape.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up