Trezor Chief Commercial Officer Danny Sanders warned at BTC Prague last week that the growing reliance on bitcoin exchange-traded funds poses a risk to the cryptocurrency's core self-custody principle. Sanders argued that more investors using ETFs instead of holding their own private keys would be detrimental to the industry, despite ETFs being a major driver of bitcoin's price since their U.S. launch in early 2024. Investors have poured more than $53 billion into spot bitcoin ETFs since that launch, but Sanders emphasized the need to focus on making self-custody easier rather than encouraging reliance on intermediaries.
Sanders Highlights Self-Custody Challenges for New Users
Sanders made the comments while discussing the challenges of onboarding new users to self-custody, which allows users to be the sole controller of their bitcoin instead of entrusting their assets to exchanges or custodians. Self-custody comes with a downside in that there is no backstop or recourse for someone to get their crypto back if they lose or misprint their seed phrase, or get tricked into sharing their private keys with a scammer. Sanders argued that the barriers are more psychological than technical, stating, "It sounds so scary, but it's actually not. Once you do it, it's not that hard."
Trezor Reports 10% Self-Custody Rate Among 600 Million Global Crypto Users
According to Sanders, the crypto industry now counts roughly 600 million users globally, but only around 10% self-custody their assets. Of those, just 12 million to 13 million use hardware wallets, which are generally considered the most secure way to hold one's private keys.
Trezor Founded in Prague in 2013, Pioneered BIP-39 Standard
Trezor was founded in Prague in 2013 and helped pioneer the crypto hardware wallet sector. The company introduced several foundational technologies that are still used in Bitcoin today, most notably the mnemonic seed phrase standard known as BIP-39.
Sanders Advocates Better UX Over Intermediary Reliance
In Sanders' opinion, the industry needs to continue focusing on making self-custody easier through better user experiences, educational tools, and backup systems rather than encouraging users to rely on intermediaries. "The goal is to match the web2 experience over time," Sanders said. "We're not there yet, but I think that's the hardest thing that we all need to keep on focusing on and not saying, 'Okay, let's just put it in an ETF.' That's kind of the worst outcome, I think, for the industry."
FAQ
What did Trezor's CCO say about bitcoin ETFs at BTC Prague?
Trezor Chief Commercial Officer Danny Sanders warned at BTC Prague last week that the growing reliance on bitcoin ETFs poses a risk to the cryptocurrency's core self-custody principle, arguing that more investors using ETFs instead of holding their own private keys would be detrimental to the industry.
How many crypto users globally self-custody their assets according to Trezor?
According to Sanders, the crypto industry counts roughly 600 million users globally, but only around 10% self-custody their assets, with just 12 million to 13 million using hardware wallets.
