Explaining The Benefits Of Bitcoin ETFs Over Self-Custody

Let’s be honest: the future of money can be a little complicated and even a little confusing. Even the story of BitcoinThe creator sounds more like something from a sci-fi movie than the background of a financial venture. But that doesn’t detract from the incredible potential that Bitcoin has to offer.

The biggest bottlenecks to widespread adoption have to do with asset volatility but also the complexity of blockchain technology. Investing in cryptocurrencies typically involves directly owning and responsible for managing digital assets.

However, as Bitcoin gains wider acceptance with mainstream and institutional investors, new ways to approach BTC are being introduced. Here are some benefits of investing in a Bitcoin ETF over self-custodial.

What makes Bitcoin different?

Bitcoin is an amazingly disruptive technology that allows individuals to essentially be their own bank and transact with other individuals or businesses, all without the need for a trusted third party like bank, credit card processor, or otherwise.

The idea is that without banks, users and individuals have more control over their assets. But more control comes with more responsibility. If a hacker or thief gets access to a credit or debit card, the middleman will refund your money and track down the culprit responsible for you. With cryptocurrency, there is no third party to support you.

Being your own bank is hard

While there exist horror stories that focus solely on hacking or other types of loss, the worst types that are likely to be read are those involving forgotten passwords and private keys. Cryptocurrencies like Bitcoin have both public and private keys. The public key acts as an address a user can send to and from, while the private key is essentially an encryption password.

Early Bitcoin users who often had large amounts of BTC forgot or misplaced their handwritten passwords and private keys, resulting in millions of dollars worth of BTC locked up and potentially lost forever. This is like losing your house or car keys and never being able to get in again. Even top crypto executives with a better understanding have reported losing tens of thousands of BTC this way.

Eliminate self-custodial risk with Bitcoin ETF

With all the risks involved in owning and holding bitcoin, why would anyone consider owning it? The first recorded price per BTC was less than a cent. Today, each coin is worth about $40,000, and the highest price recorded is over $68,000. With an ROI of over a million percent since its launch over a decade ago, it is one of the most lucrative assets in financial history.

Angel investors compare owning BTC to owning a piece of the Internet in the 90s. Institutional investors see this as a way to diversify their traditional portfolios due to the relationship. correlation with stocks is very low. Retail investors see this as the next big money. But what must these investors do to avoid the risks associated with self-custodial? The answer is in Bitcoin-based ETFs and mutual funds.

Enter Bitcoin ETF: The Answer to Accessibility

An ETF is an exchange-traded fund, which means that a trusted entity like Fidelity is taking on the risks associated with crypto-asset custody, giving investors access to the underlying asset. in a much safer way, right through their traditional brokerage account.

For example, the Fidelity Advantage Bitcoin ETF (FBTC) is based on the same institutional platform that Fidelity offers to all customers and provides investors with a way to gain exposure to Bitcoin from a trusted brand . In addition to the comfort, convenience, and safety offered by a Bitcoin ETF, it eliminates the need to search for blockchain-based crypto wallets and any of the complications associated with crypto cold storage.