Trezor Exec: Putting All Bitcoin into ETFs Might Be the Worst Outcome for the Industry, Undermining the Core Principle of Self-Custody

Odaily Planet Daily News: Danny Sanders, Chief Business Officer of hardware wallet manufacturer Trezor, stated that "putting everything into ETFs" might be the worst development path for the Bitcoin ecosystem. Since the launch of US spot Bitcoin ETFs in early 2024, cumulative inflows have exceeded $53 billion, making them a significant driver of BTC prices, but also potentially altering the structure of how users hold their assets.

Sanders believes that over-reliance on ETFs will weaken Bitcoin's core principle of "self-custody," gradually shifting asset control to third-party institutions instead of users holding their private keys. Although self-custody carries risks such as lost seed phrases or unrecoverable private key leaks, he considers these more of a psychological barrier than a technical challenge, adding that "it's not difficult once you actually start doing it."

Data shows that out of approximately 600 million crypto users globally, only about 10% practice self-custody, and only around 12 to 13 million users employ hardware wallets.

As an early hardware wallet provider in the industry, Trezor helped popularize the BIP-39 seed phrase standard and continues to advocate for lowering the barriers to self-custody through improved user experience and educational tools, rather than relying on intermediary custody.

Sanders concluded that the industry's long-term goal should be to gradually approach a Web2-level user experience, rather than simply replacing self-custody with ETFs. "That would probably be the worst possible outcome for the entire industry." (The Block)