Bitcoin is becoming centralized in ETFs, making the cost of hacking rise

[LuckyCrypto777]

According to River statistics, the current Bitcoin distribution looks like this:
Individuals: 13.98 million (66.6%)
Companies: 1.63 million (7.8%)
Funds and ETFs: 1.44 million (6.9%)
Governments: 435,000 (2.1%)
Satoshi: 968,000 BTC (4.6%)
Lost Bitcoin (estimate): 1.62 million (7.7%)
Remaining to be mined: 919,000 (4.4%)



Bitcoin is becoming increasingly concentrated in ETFs, making the risk of custodians being hacked more and more serious. There aren't many of them: Coinbase Custody, Fidelity... A hacker could make a lot of money.
Perhaps that's why laws are being considered in the US, which, if I understand correctly, will further break up the custodian monopoly?
And lead to greater deconcentration of Bitcoin in the ETF space.

[_act_]

I do not know if it is all the ETF companies that are saying this, but they said the funds are stored on a cold wallet. But the hackers are very wise, I think there could be a day that one will be hacked as there will be huge amounts of bitcoin on the ETF wallet. But not only bitcoin, there are other coins that has ETF already which hackers will also he looking for ways to breach.

But it is good to know that many of the ETF companies have insurance

[Questat]

Bitcoin is becoming increasingly centralized in ETFs, making the risk of custodians being hacked more and more serious. There aren't many of them: Coinbase Custody, Fidelity... A hacker could make a lot of money.

No, not like that. Bitcoin is still decentralized, the network and system haven't changed. what only happened is that the custody is now more concentrated and that is understandable since not everyone is confident to hold their Bitcoin in their own wallet. But never link that to Bitcoin itself as it remains as it is.

[stompix]

Individual wallets and exchanges are hacked on a daily basis, till date no ETF or actual custodian service has been hacked.

Also, there is no centralization happening; because of that, eveyone is free to do what he wants with his coins and somebody owning 50% of them doesn't make it centralized, just as Bitcoin wasn't centralized in mid 2010 when Satoshi owned half of them.

And lead to greater decentralization of Bitcoin in the ETF space.

Yeah, what could be better for Bitcoin than some ETF cold wallet or MSTR wallet being hacked and all coins stolen?
Are you that dumb?

[ZeroVinsonN]

Bitcoin is becoming increasingly centralized in ETFs, making the risk of custodians being hacked more and more serious. There aren't many of them: Coinbase Custody, Fidelity... A hacker could make a lot of money.

No, not like that. Bitcoin is still decentralized, the network and system haven't changed. what only happened is that the custody is now more concentrated and that is understandable since not everyone is confident to hold their Bitcoin in their own wallet. But never link that to Bitcoin itself as it remains as it is.

I think that when he said centralized he didn't mean it luke bitcoin was becoming controlled but more about how too much bitcoin is concentrated on very few wallets, saying centralized might have seemed like a poor choice of wording but a major hack on these concentrated wallets will have the same effect as it would on a centralized asset.

But it is good to know that many of the ETF companies have insurance

It's still to big a risk, insured or not, after all there is only so much money whatever company is insuring them will be able to pay back depending on the size of the hack.

[LuckyCrypto777]

Bitcoin is becoming increasingly centralized in ETFs, making the risk of custodians being hacked more and more serious. There aren't many of them: Coinbase Custody, Fidelity... A hacker could make a lot of money.

No, not like that. Bitcoin is still decentralized, the network and system haven't changed. what only happened is that the custody is now more concentrated and that is understandable since not everyone is confident to hold their Bitcoin in their own wallet. But never link that to Bitcoin itself as it remains as it is.

You expressed my thought correctly, I simply chose the wrong word. Of course, the structure of the situation hasn't changed. What happened is that its storage has become centralized.

Yeah, what could be better for Bitcoin than some ETF cold wallet or MSTR wallet being hacked and all coins stolen?
Are you that dumb?

I mean deconcentration

[stompix]

Yeah, what could be better for Bitcoin than some ETF cold wallet or MSTR wallet being hacked and all coins stolen?
Are you that dumb?

I mean deconcentration

It doesn't matter what you thought of it or how you worded.
NOTHING good will come out of a hack of a major institutional holder!
- major money will freeze investments
- the public image will be severely affected
- say goodbye to a state reserve made out of Bitcoin
- last but not least, throwing half a million coins on the market, where do you think 50 billion to keep the price afloat will come from?

[Alpha Marine]

I mean deconcentration

A hack on any ETF company won't cause more decentralisation or deconcentration.
And the new policies of the SEC from the link you posted in the OP won't do that either.
CEXs are hacked frequently, why hasn't that made people focus on decentralisation? Do you think people who keep their money with ETF companies don't know that there is a risk of being hacked? They are insured, so it mitigates the risk for them. That is an advantage self custody does not give them.
So if hacks on exchanges does not promote decentralisation, why do you think a hack on an ETF company will when the people who keep their funds there are already protected?