As the crypto community anticipates the potential approval of a spot Bitcoin Exchange-Traded Fund (ETF) in the United States, Trezor Bitcoin analyst Josef Tetek warns that such services could further distance people from self-custody of assets. Nonetheless, many industry observers do not see a direct conflict between the spot Bitcoin ETF and the concept of self-custody.
A spot Bitcoin ETF is an investment vehicle that holds Bitcoin and tracks its price, allowing investors to buy and sell Bitcoin through a traditional brokerage account. This contrasts with self-custody solutions, where users take on the responsibility of holding private keys to directly own Bitcoin.
Many analysts believe that these different investment methods for Bitcoin do not compete with each other. Jan3 CEO Samson Mow states that ETFs are for funds and institutional investors who cannot hold the underlying asset but predicts that institutions will eventually be authorized to hold Bitcoin directly. He adds that some individual investors might buy ETFs for tax efficiency but emphasizes the importance of holding actual Bitcoin.
David Gerard, author of “Attack of the 50 Foot Blockchain” and a crypto blogger, echoes a similar sentiment, suggesting that holding assets is for serious Bitcoin enthusiasts or investors cautious about the risks of holding keys. He believes there is no problem with having both options available to investors.
Leah Wald, co-founder and CEO of Valkyrie, one of the applicants for a spot Bitcoin ETF in the U.S., also supports this view, stating that it’s not a conflict but a matter of preference. Some investors may prefer self-custody of their Bitcoins, while others might choose the convenience of an ETF to access Bitcoin’s potential without the burdens of self-custody.