Danny Sanders, a senior executive at hardware wallet maker Trezor, said the growing practice of holding Bitcoin in ETFs could pose long-term risks to the fundamentals of the cryptocurrency industry.
Speaking at the BTC Prague event, Trezor Chief Commercial Officer Sanders said there are around 600 million cryptocurrency users worldwide, but only around 10% of these users hold their assets using their own storage methods. According to Sanders, the number of people using hardware wallets is only between 12 and 13 million.
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The fact that spot Bitcoin ETFs in the United States have attracted over $53 billion in inflows since their launch in 2024 has significantly increased institutional investor participation in Bitcoin. However, Sanders warned that this trend could weaken users’ desire to have direct control over their private keys.
Sanders argued that while individual custody is a fundamental feature of the Bitcoin system, there are still significant challenges in terms of user experience and security. Therefore, many investors prefer to participate in the market through intermediary solutions such as exchanges, custodial services or ETFs.
The Trezor executive said that instead of accepting a structure that pushes Bitcoin into ETFs altogether, the industry should focus on making individual custody simpler and more secure. According to Sanders, a move toward ETF-dominated long-term ownership of Bitcoin could weaken the idea of decentralized assets and become the “worst case scenario” for the industry.
*This does not constitute investment advice.
