The rise of Bitcoin exchange-traded funds (ETFs) has sparked debate as they reshape crypto investment. While these ETFs provide regulatory clarity and open access to crypto for traditional investors, they also centralize what was designed to be decentralized. Different ETF models exist, with Hong Kong's in-kind approach ensuring actual crypto backing, contrasting with the US cash-based model that involves fiat and abstracting crypto. Critics argue that ETFs, while convenient, introduce risks such as custodian reliance and management fees, undermining the principles of self-custody and empowerment central to decentralized finance (DeFi). ETFs may lead to concentration of power among large institutional players, who can dictate terms and undermine governance aspects of tokens. Although ETFs can provide a semblance of safety, they ultimately detract from the core ethos of crypto, which champions direct ownership and community engagement over a return to traditional financial intermediaries.

Source 🔗