Since their launch in January 2024, US-based spot Bitcoin ETFs have been on a remarkable upward trajectory, breaking and setting new benchmarks within the global ETF arena. Notably, BlackRock’s iShares Bitcoin Trust (ticker: IBIT) has quickly amassed $80 billion in assets under management, setting a record for speed.
The rising acceptance and popularity of Bitcoin ETFs are evidently reshaping the crypto investment landscape. According to a well-known analyst on the social media platform X, Bitcoin investors are leaning towards a more conventional approach to engaging with the world’s leading cryptocurrency.
Do Bitcoin ETFs Align with BTC’s Decentralization Principles?
Crypto analyst Willy Woo noted on X on July 18 that there has been a decline in the growth rate of self-custody Bitcoin users over the past year. Woo attributes this trend to the increasing prominence of spot Bitcoin ETFs, marking the end of a 15-year pattern.
This observation is based on the Glassnode Entities Net Growth metric, which measures the daily rate of new user adoption on a blockchain network, specifically Bitcoin in this case. Woo emphasized that this metric tracks entities—groups of addresses managed by a single user—rather than individual addresses.
The Entities Net Growth metric calculates the net change between new and “disappearing” entities (those with a zero balance after previously holding a non-zero balance). As shown in the chart below, this metric has been declining since 2023, with a sharper drop following the introduction of Bitcoin ETFs in the US.
This trend indicates that more investors prefer accessing the Bitcoin market through institutional products like ETFs rather than directly acquiring it via private wallets. Woo pointed out in a response on X that this shift might lead to a centralization of Bitcoin supply.
Interestingly, this development somewhat challenges Bitcoin’s core principle, as articulated by Satoshi Nakamoto, of fostering a decentralized financial system. However, Bitcoin ETFs are seen as an entry point for individuals—especially older generations—who face difficulties accessing crypto through traditional self-custody wallets.
A member of the crypto community on X noted:
ETFs didn’t take users away from cold storage… They opened the market to those previously restricted by compliance barriers.
Current Bitcoin Price Overview
At the time of this report, Bitcoin is priced at approximately $108,200, marking a 0.4% increase over the last 24 hours.
