‘Another nail in the coffin’ of original crypto spirit: Whales ditch self-custody for ETFs

Wealthy Bitcoin holders are moving billions into ETFs like BlackRock’s IBIT as tax benefits and SEC rule changes drive a shift away from self-custody.

Bitcoin’s self-custody era may be ending as wealthy holders increasingly transfer assets into regulated exchange-traded funds (ETFs) amid tax incentives and improving institutional infrastructure.

In a Wednesday post on X, Martin Hiesboeck, head of blockchain and crypto research at crypto financial services platform Uphold, said the movement of large Bitcoin (BTC) wallets into ETFs marks the first significant decline in self-custodied BTC in more than 15 years.

“Another nail in the coffin of the original crypto spirit,” he wrote, noting that the “not your keys, not your coins” ethos that once defined the asset is giving way to a more traditional approach centered on compliance and financial optimization.

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