Trezor Executive Argues That Bitcoin and Altcoin Spot ETFs Pose Long-Term Risks

Danny Sanders, a senior executive at hardware wallet manufacturer Trezor, said that the increasing practice of holding Bitcoin in ETFs could pose long-term risks to the fundamental principles of the cryptocurrency sector.

Speaking at the BTC Prague event, Trezor Business Director Sanders stated that there are approximately 600 million cryptocurrency users worldwide, but only about 10% of these users hold their assets using their own storage methods. According to Sanders, the number of people using hardware wallets is only between 12 million and 13 million.

The fact that spot Bitcoin ETFs in the US have attracted more than $53 billion in inflows since their launch in 2024 has significantly increased institutional investor stake in Bitcoin. However, Sanders warned that this trend could weaken users’ desire to have direct control over their private keys.

Sanders argued that while individual custody is a fundamental feature of the Bitcoin system, there are still significant challenges regarding user experience and security. Therefore, many investors prefer to participate in the market through intermediary solutions such as exchanges, custody services, or ETFs.

The Trezor executive stated that instead of accepting a structure that completely pushes Bitcoin into ETFs, the industry should focus on making individual custody easier and safer. According to Sanders, a shift towards long-term Bitcoin ownership dominated by ETFs could weaken the idea of decentralized assets and become a “worst-case scenario” for the industry.

*This is not investment advice.