Trezor Executive: Entrusting All Bitcoin to ETFs Could Be the Worst Outcome for the Industry, Undermining the Core Principle of Self-Custody

Odaily Planet Daily News: Danny Sanders, Chief Commercial Officer of hardware wallet manufacturer Trezor, stated that "putting everything into ETFs" could 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, becoming a significant force driving BTC prices, but also potentially altering the structure of user holdings.

Sanders believes that over-reliance on ETFs will weaken the core principle of "self-custody" in Bitcoin, causing users to gradually cede control of their assets to third-party institutions instead of holding their own private keys. While self-custody carries risks such as losing seed phrases or irreversible private key leaks, these are more psychological barriers than technical challenges, adding that "it's not difficult once you actually get started."

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

As an early hardware wallet manufacturer in the industry, Trezor pioneered the popularization of 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 progressively approach a user experience comparable to Web2, rather than simply replacing self-custody with ETFs, stating that "would be the worst possible outcome for the entire industry." (The Block)