Trezor Exec: Putting All Bitcoin into 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 U.S. 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 Bitcoin's core principle of "self-custody," gradually shifting control of assets from users to third-party institutions rather than having them hold their own private keys. While self-custody carries risks such as losing seed phrases or unrecoverable private key leaks, these are more psychological hurdles than technical challenges, adding that "it's not difficult once you actually get started."

Data shows that among approximately 600 million crypto users worldwide, only about 10% practice self-custody, with only around 12 to 13 million users using hardware wallets.

As an early hardware wallet manufacturer 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 custodial intermediaries.

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