In recent weeks, newly sanctioned U.S. bitcoin ETFs have experienced remarkably successful launches, judging by trading volume and flow metrics. However, it’s crucial to note that these ETFs diverge from the authentic purpose of Bitcoin, which is to facilitate peer-to-peer transactions and bypass traditional intermediaries.
Investors in Bitcoin ETFs essentially gain exposure to the cryptocurrency’s price without actually owning the asset. This misses the essence of what Bitcoin represents—financial ownership and sovereignty for anyone. This aligns with the vision laid out by Bitcoin’s mysterious creator, Satoshi Nakamoto, in the groundbreaking white paper from 15 years ago.
The fundamental issue with Bitcoin ETFs lies in their replication of the outdated financial system, built on antiquated technologies and reintroducing counterparty risks. Historical examples like Lehman Brothers, FTX, or Silicon Valley Bank highlight the dangers of relying on intermediaries who mismanage client assets, leading to massive financial losses.
Crypto offers an escape from this flawed system, satisfying only 9% of Americans, as it brings decentralization and permissionless access to a global network. In contrast, Bitcoin ETF investors face counterparty risks and remain confined within the U.S.-centered financial system.
Crucially, these investors lack ownership of what truly matters in crypto—the “private key,” a secret, algorithmically-generated code proving sole ownership of digital tokens. Private keys are the gateways to crypto’s future, enabling participation in decentralized finance and ownership of Bitcoin—something ETFs can never provide.
Despite their contradictions to crypto’s utility, Bitcoin ETFs serve a purpose. They can attract new entrants to the crypto space and act as powerful marketing tools. Additionally, they might serve as gateways to crypto’s promised land of self-custody, similar to how centralized exchanges did in the past.
Acknowledging the benefits of Bitcoin ETFs, they should be viewed as stepping stones toward the ultimate promise of ownership and sovereignty in crypto. The future of Bitcoin isn’t confined to becoming a speculative asset stored in ETFs; instead, it signifies a paradigm shift in digital ownership and value exchange, reminiscent of the internet’s transformative impact on information exchange in the late-1990s.
The journey to crypto-enabled financial freedom is ongoing, and Bitcoin ETFs play a role in this broader narrative. True potential will only be realized when mainstream users have genuine sovereignty over their assets in the crypto landscape.
