In
recent
weeks,
newly
approved
U.S.
bitcoin
ETFs
have
had
stunningly
popular
launches,
judged
by
trading
volume
and
flow
metrics.
However,
these
ETFs
have
nothing
to
do
with
the
true
utility
of
Bitcoin,
which
is
to
facilitate
peer-to-peer
transactions
and
circumvent
traditional
intermediaries.
Bitcoin
ETF
investors
merely
get
exposure
to
the
price
of
Bitcoin.
They
never
own
the
asset.
ETF
participants
don’t
benefit
from
what
Bitcoin
stands
for
in
the
first
place,
which
is
to
allow
anyone
to
experience
financial
ownership
and
sovereignty.
This
is
precisely
what
Bitcoin’s
anonymous
inventor
Satoshi
Nakamoto
aimed
for
when
writing
the
Bitcoin
white
paper
15
years
ago.
The
main
problem
with
Bitcoin
ETFs
is
that
they
merely
replicate
the
functioning
of
our
outdated
financial
system
built
on
old
technologies.
By
relying
on
intermediaries,
Bitcoin
ETFs
reintroduce
counterparty
risks
that
have
underpinned
finance
for
decades.
Take
Lehman
Brothers,
and
more
recently
FTX
or
Silicon
Valley
Bank.
These
are
just
a
few
examples
of
traditional
players
mismanaging
their
clients’
assets
and
wiping
out
billions
of
dollars
in
the
snap
of
a
finger.
Crypto
is
the
way
out
of
this
flawed,
archaic
system,
which
currently
satisfies
only
9%
of
Americans.
In
addition
to
facing
counterparty
risks,
Bitcoin
ETF
investors
are
also
locked
within
the
confines
of
the
U.S.-centered
financial
system,
while
crypto’s
core
attribute
is
to
enable
anyone
to
access
a
permissionless
network
and
benefit
from
an
unparalleled
level
of
decentralization.
ETFs
have
frontiers,
while
crypto
is
permissionless.
The
two
stand
radically
opposed.
Importantly,
Bitcoin
ETF
investors
don’t
own
what
truly
matters
in
crypto:
a
“private
key”
or
a
secret,
algorithmically-generated
code
mathematically
proving
that
users
are
their
digital
tokens’
sole
owners.
Holding
these
keys
is
the
only
way
for
people
to
interact
with
the
world
of
crypto,
own
Bitcoin,
get
involved
with
decentralized
finance,
and
leverage
decentralized
apps
with
ownership
and
freedom.
Private
keys
are
entry
points
to
the
future
of
finance
and
the
future
of
the
Internet.
That’s
something
ETFs
will
never
be
able
to
provide.
Besides
contradicting
crypto’s
utility,
let’s
not
forget
that
Bitcoin
ETFs
are
more
expensive
than
the
sovereign
choice
of
secure
self-custody.
With
Bitcoin
ETFs,
people
pay
fees
ranging
from
0.2%
to
1.5%
not
to
own
the
underlying
asset.
Furthermore,
the
need
for
security
is
as
crucial
for
corporate
players
as
it
is
for
individuals
onboarding
crypto.
Financial
intermediaries
engaged
in
ETFs,
responsible
for
safeguarding
their
clients’
assets,
must
employ
adapted
security
and
governance
frameworks
to
avoid
FTX-like
disasters.
Pro
ETF
Does
that
mean
that
Bitcoin
ETFs
are
a
bad
thing
for
crypto?
Not
at
all.
We’re
not
anti-ETFs
at
Ledger.
Despite
deviating
from
crypto’s
stated
end-goal,
these
traditional
financial
instruments
will
serve
Bitcoin
on
multiple
fronts.
First,
besides
bringing
a
fresh
wave
of
new
entrants
gaining
crypto
exposure,
Bitcoin
ETFs
have
the
potential
to
greatly
popularize
Bitcoin.
In
fact,
the
Bitcoin
ETFs
advertisements
flourishing
across
U.S.
soil
highlights
that
ETFs
are
the
most
powerful
marketing
tools
ever
created
for
Bitcoin!
On
top
of
that,
as
Bitcoin
is
now
accepted
into
the
highest
spheres
of
the
financial
system,
it
will
also
become
much
harder
for
skeptics
to
dismiss
this
crypto
protocol
as
an
instrument
for
illicit
activities.
Second,
I
believe
that
Bitcoin
ETFs
are
bound
to
serve
as
gateways
to
crypto’s
promised
land
of
self-custody,
just
as
centralized
exchanges
did
over
the
past
years.
A
virtuous
cycle
might
actually
unfold
where
millions
of
people
get
ETF
exposure
to
Bitcoin,
learn
the
benefits
of
digital
ownership,
and
ultimately
opt
for
true
self-sovereignty.
Interestingly,
from
2004,
the
approval
of
the
first
gold
ETFs
didn’t
hinder
gold’s
private
ownership
either;
instead,
it
popularized
it.
Bitcoin
ETFs
are
a
form
of
window-dressing,
but
they
are
very
real,
and
we
should
use
them
as
a
stepping
stone
towards
the
true
promise
of
ownership
and
sovereignty
of
crypto.
Contrary
to
the
skeptics’
belief,
the
future
of
Bitcoin
isn’t
to
become
a
speculative
asset
merely
stored
in
ETFs-like
investment
vehicles
that
mainstream
investors
would
get
exposure
to.
Instead,
it’s
a
paradigm
shift
poised
to
re-write
the
rules
of
digital
ownership
and
reshape
value
exchange
—
akin
to
how
the
internet
transformed
information
exchange
for
billions.
Today,
people
are
barely
beginning
to
grasp
the
full
range
of
use
cases
the
crypto
revolution
will
provide,
just
as
they
barely
understood
the
true
potential
of
the
internet
in
the
late-1990s.
A
revolution
of
this
scale
is
a
marathon,
not
a
sprint.
Bitcoin
ETFs
are
just
a
step
in
the
broader
journey
to
crypto-enabled
financial
freedom.
Only
when
mainstream
users
have
true
sovereignty
over
their
assets
will
the
true
potential
of
crypto
be
realized.
