Bitcoin ETF is an idea from centralized system

[Sobz]

Bitcoin ETF is a fund that invests in Bitcoin for investors, where investors also own shares and not actual Bitcoin. I think the firms behind the idea of Bitcoin ETFs were influenced by the concept of centralization. When Bitcoin is invested in an ETF, it is assumed that investors don't have a key and that the investment is being managed by the ETF custodian.

Bitcoin self-custodial investors and ETF investors can never have the same reasons or ideas when investing in Bitcoin. A Bitcoin investor who is self-custodial is investing in Bitcoin -

• to be incharge of or control the investment.

• believes in "not your keys, not your coins,"
  

• and does not believe in brokers.
  

On the other hand,
ETF investors prefer financial institutions for managing their private keys.
Feels the investment is safe with institution managing it.

ETFs may attract more investors to invest in Bitcoin, but they don't encourage Bitcoin privacy for investors and don't give investors full control of their Bitcoin. These two types of investors have the same goal: to invest in Bitcoin, but their ideas are different.[/list][/list]

[Charles-Tim]

ETF investors prefer financial institutions for managing their private keys.

Let us make it more clear, they do not prefer the institutions for managing their private keys, they do not have any keys at all for the institutions to manage. You have included it in your post already that it is shares that people are buying from the bitcoin ETF institutions. All they have is the shares that is having bitcoin spot price and not actually bitcoin in anyway.

[Doan9269]

ETF investors prefer financial institutions for managing their private keys.
Feels the investment is safe with institution managing it.

I think we need to spell it out here that some are not only bitcoin spot ETF investors but they are being found in it because of asset diversification, While some even taught maybe when considered an institutional investment, their assets will be more secured because of the policy that designed in securing their assets safety than taking risk in Bitcoin network they don't know much about.

ETFs may attract more investors to invest in Bitcoin, but they don't encourage Bitcoin privacy for investors and don't give investors full control of their Bitcoin. These two types of investors have the same goal: to invest in Bitcoin, but their ideas are different.[/list][/list]

Investors are truly investing on Bitcoin stocks from them, then why can't they do it by themselves without going through a thought party institution to regulate their capacity to how they could maximize their income open their investment on bitcoin backed asset or stocks.

[dzungmobile]

Let us make it more clear, they do not prefer the institutions for managing their private keys, they do not have any keys at all for the institutions to manage. You have included it in your post already that it is shares that people are buying from the bitcoin ETF institutions. All they have is the shares that is having bitcoin spot price and not actually bitcoin in anyway.

Many Bitcoin Spot ETFs even don't store bitcoins by themselves. They are not self custodians and the custodians mostly are other companies and the most common choice from Bitcoin Spot ETFs is Coinbase. It's unsafe for Bitcoin Spot ETF companies and it's more dangerous for their customers.

You can see custodians of Bitcoin Spot ETFs there
https://blockworks.com/analytics/bitcoin-etf/tracker

[BlackHatCoiner]

Boomers, pension funds, people who want Bitcoin exposure in their brokerage without dealing with seed phrases. It's not really competing with self-custody, it's pulling in money that would otherwise never touch bitcoin.

The risk is if people forget the difference and assume an ETF share is the equivalent of owning Bitcoin. As long as that distinction stays clear, both can coexist fine. We're not going to reach the sky without institutional buyers, sorry. There's just too much capital that cannot touch on-chain BTC, but can touch shares of a company or an ETF.

[Little _damsel]

 I love this topic OP!
Bitcoin ETF and self-custody are like two different roads to the same house.

Bitcoin ETF like Blackrock’s IBIT.
When you buy IBIT, you’re buying shares of a fund on the stock market. Just like buying Apple or Tesla stock. 
BlackRock buys real Bitcoin and keeps it with Coinbase as the custodian. You get digital shares in your broker app. 
Those shares go up and down with Bitcoin price. But you can’t withdraw the Bitcoin. You can only sell the shares for dollars.

While in self–custody; you buy Bitcoin and keep it yourself with your 12 words/seed phrase. No company in the middle, if you lose your words, it’s gone. If you keep them safe, nobody can take it. It’s hard, yes! but you have full control.

So the difference I'd say is, trust vs control.   
An ETF investor will say “I trust banks to protect my money” 
While a self-custody investor says “I trust myself to protect my money”
Both want Bitcoin to go up in price, but their mindset is opposite.

ETFs bring people into Bitcoin, but self-custody is what Bitcoin was actually built for.

[legiteum]

Absolutely correct. Using Bitcoin with an ETF, a broker, an app, CoinBase, Binance, Robinhood, MSTR, etc. etc. etc. is no different than owning a stock in a company or just putting some cash in a bank in USD.

The only way to experience "real Bitcoin" wherein you gain its purported advantages is to have your own wallet with your own secret keys which you yourself maintain.

Yes, probably today most BTC investors don't use Bitcoin this way, but Bitcoin today has about as much to do with its roots as a cyberpunk cryptocurrency as Coca Cola has in common with its original use as a cold medicine.

[arzuo]

☠️These big marketers and politicians are manipulating because they know about the power of Bitcoin.
There have been cases in history where keeping gold at home was considered a crime (I saw this in an online video).
Market manipulation, spreading negative 🚨 news in the market, and various stocks and manipulations
centered around BTCitcoin—all of these are excellent strategies to grab all the Bitcoin.

[ZAINmalik75]

Of course, Bitcoin ETFs are a centralized way of investing in Bitcoin, and they are used by people who trust those firms and companies more than themselves, which is probably why they believe instead of buying actual bitcoins and keeping them with themselves in self-custodial wallets, they should allow the companies or firms to do everything for them, while they just make their investments, hold for as long as they want, and then sell their shares to get their profits while they don't have to manage their bitcoins themselves.

Most of them believe that this is a safer way of investing in Bitcoin because you basically don't have the risk of your bitcoins getting stolen, or you losing your wallet somehow and losing access to your assets forever, and they barely care about decentralization because they are mostly into centralized systems. Most of the ETF investors are businessmen or those who are pretty much into centralized systems themselves, they either work in them or support them from all their heart.

[Bitcoin-Forever]

Maybe they thought that bitcoin ETF will as well take people's attention from bitcoin network and everyone will be persuaded to go for such under centralized institutions, so that they can still achieve their censorship and regulate our assets in their capacity.

If you are not investing in Bitcoin, they know that you are only contributing your assets to those that will determine what they do with it and the spread the give you upon your asset performance with them, but never forget that they have your information with you and you are not always protected by privacy.

[PrivacyG]

I do not mind ETFs as long as they do not affect Bitcoin in any way.  They theoretically do not.  I only wish more people would NOT adopt ETFs but rather invest in Bitcoin the 'traditional' way.

People who purchase ETFs do not want to find out how to properly hold Bitcoin, how to use it et cetera.  ETFs are the right choice for them.  Why force them to have Bitcoin when they only really want to speculate.

[Ambatman]

I believe many people that make use of ETF even OGs through AP do so because of the tax benefit.
But has always been emphasised
Holding via ETF is just like buying a share that's more like an IOU on the Bitcoin they own
While also paying them a fee.
We in a centralised society
And many people are already used to being dependent on a third party.

[Chibit01]

Many Bitcoin Spot ETFs even don't store bitcoins by themselves. They are not self custodians and the custodians mostly are other companies and the most common choice from Bitcoin Spot ETFs is Coinbase. It's unsafe for Bitcoin Spot ETF companies and it's more dangerous for their customers.

That's another scary thing which I saw while reading about Bitcoin ETF custodial majorities of all the bitcoins acquired through ETF are being held by Coinbase through their custody service company. If anything happens to that company, and somehow it gets bridged, hundreds of billions belonging to mostly US investors will be lost while they all mostly choose Coinbase Custody Trust Company instead of relaying on their own security or does it have to do with some kind of insurance policy?

[Smartprofit]

I do not mind ETFs as long as they do not affect Bitcoin in any way.  They theoretically do not.  I only wish more people would NOT adopt ETFs but rather invest in Bitcoin the 'traditional' way.

People who purchase ETFs do not want to find out how to properly hold Bitcoin, how to use it et cetera.  ETFs are the right choice for them.  Why force them to have Bitcoin when they only really want to speculate.

On the other hand, if there weren't spot ETFs, people would come to our Bitcointalk forum and ask us about the best way to buy and store Bitcoin. And we would answer their questions. 🙋

Instead, people buy surrogate Bitcoins. They're convinced they own real Bitcoins... And how can we be sure there aren't more of these surrogate Bitcoins created than the real thing? No. We're not sure...

The idea that spot ETFs, government regulations, or Michael Saylor's actions don't affect Bitcoin is refuted by the current price of Bitcoin. It's very low, especially considering what Bitcoin was worth five years ago ($69,000). And considering the dollar's inflation over that time...

Centralized storage alone is already causing significant damage to the Bitcoin network.

[Cryptomultiplier]

I do not mind ETFs as long as they do not affect Bitcoin in any way.  They theoretically do not.  I only wish more people would NOT adopt ETFs but rather invest in Bitcoin the 'traditional' way.

People who purchase ETFs do not want to find out how to properly hold Bitcoin, how to use it et cetera.  ETFs are the right choice for them.  Why force them to have Bitcoin when they only really want to speculate.

On the other hand, if there weren't spot ETFs, people would come to our Bitcointalk forum and ask us about the best way to buy and store Bitcoin. And we would answer their questions. 🙋

Instead, people buy surrogate Bitcoins. They're convinced they own real Bitcoins... And how can we be sure there aren't more of these surrogate Bitcoins created than the real thing? No. We're not sure...

The idea that spot ETFs, government regulations, or Michael Saylor's actions don't affect Bitcoin is refuted by the current price of Bitcoin. It's very low, especially considering what Bitcoin was worth five years ago ($69,000). And considering the dollar's inflation over that time...

Centralized storage alone is already causing significant damage to the Bitcoin network.

One thing about ETF is that it has recorded large net outflows of capital and as well a massive influx of capital because it was created for large pockets and institutional holders.

To be frank also, ETFs don't follow nor sway according to the original  core principles of privacy and self soverignty that Bitcoin was actually created with the intention of fulfilling.

Still, ETF investors are also Bitcoin investors no matter how you see it, even though I agree how centralization has become a basic principle for it and both Bitcoin kind of investors have some effect on the price of Bitcoin in the market.

[Myleschetty]

Bitcoin ETF is a fund that invests in Bitcoin for investors, where investors also own shares and not actual Bitcoin.

That's not correct, though. A Bitcoin ETF is a traditionalfinancial product that gives investors exposure to the price of Bitcoin through a stock brokerage account, along with the opportunity to earn dividends.

I think the firms behind the idea of Bitcoin ETFs were influenced by the concept of centralization. When Bitcoin is invested in an ETF, it is assumed that investors don't have a key and that the investment is being managed by the ETF custodian.

The idea was to treat Bitcoin like a JPEG, and BlackRock CEO Larry Fink confirmed this when he said that Bitcoin ETFs were the first step for institutions to create a technological shift and that, because they want to tokenize all financial assets, they see ETFs as the next generation for the market. Additionally, they plan to wrap BTC into a traditional financial structure.

[snowpega]

You have explained the difference very clearly and I agree but besides this, in my point of view a Bitcoin believer will always prefer self custody over an ETF as the whole point of Bitcoin is to have full control over your own assets without relying on any third party or any institution, but here these people preferring ETH and putting billions into it means they don't trust themselves but the institutions more.

Bitcoin was created to move away from traditional finance, but unfortunately, it has dissolved completely into it, and with time, new rules are combining them, like BTC was not created for this purpose. We should never forget the golden rule of this industry that not your keys, not your coins, but these ETF holders don't want to trust this line, and they don't trust themselves either.

[coupable]

Bitcoin was created to move away from traditional finance, but unfortunately, it has dissolved completely into it, and with time, new rules are combining them, like BTC was not created for this purpose. We should never forget the golden rule of this industry that not your keys, not your coins, but these ETF holders don't want to trust this line, and they don't trust themselves either.

People aren't used to take full responsability ober their assets. This is how they found shelter in ETFs and exchange platforms to help manage their investments. We have to deal with this fact because it is impossible that people can realize the importance of privacy overnight. When people thought about bitcoin to save them from modern slavery made by financial institutions, few wise people knew that bitcoin is actually in need to coexist with traditional market variables because it will help the adoption widespread. Otherwise, we wouldn't witness the popularity of bitcoin knowledge as we see it today.