The Shift from Bitcoin Self-Custody to Institutional Products
The way people own Bitcoin is evolving. The growing popularity of Bitcoin ETFs and Bitcoin treasury companies is challenging the traditional self-custody model, a principle central to Satoshi Nakamoto‘s original vision. On-chain data indicates a steady decline in Bitcoin self-custody since January 2024, coinciding with the approval of Bitcoin spot ETFs.
Understanding the Decline in Self-Custody
Analysts have observed a significant drop in the creation of new Bitcoin addresses and a sharp decrease in active addresses—from nearly 1 million in January 2024 to around 650,000 by late June. Willy Woo, a prominent analyst, highlighted this trend on X, linking it to the increasing preference for institutional custody solutions over personal wallet management.
The Advantages of Bitcoin ETFs
Leading financial institutions like BlackRock, Fidelity, and Grayscale now offer Bitcoin ETFs, simplifying access to Bitcoin. These products eliminate the complexities of private key management and provide tax benefits, security, and the convenience of traditional brokerage platforms. BlackRock‘s IBIT ETF, for instance, reached $83 billion in assets under management by July 2025, holding over 700,000 BTC.
The Rise of Bitcoin Treasury Companies
Bitcoin treasury companies provide another avenue for gaining exposure to Bitcoin without the need for self-custody. These entities hold Bitcoin as a strategic reserve asset. By the second quarter of 2025, 125 public companies had Bitcoin on their balance sheets—a 58% increase from the previous quarter.
Implications for Bitcoin’s Future
This shift toward institutional solutions sparks debate about Bitcoin’s foundational principles. While some view it as a natural progression into mainstream finance, others see it as a departure from Bitcoin’s original ethos. The discussion underscores Bitcoin’s dynamic role in the evolving financial landscape.
