Acquired Bitcoin, whether held directly by individuals with self-custody, or held by Blackrock or Fidelity to cover their ETFs takes those Bitcoins out of the available supply which increases Bitcoin scarcity. The end result is the same, fewer coins available - and that makes the price of BTC go higher.
BTW, Fidelity self-custodies their Bitcoin in-house unlike Blackrock, who uses both Coinbase and Anchorage as custodians.
You make a solid point. Whether it is retail self custody or institutions like BlackRock and Fidelity buying for their ETFs, the effect is the same,those coins leave the open market and reduce circulating supply. The custody setup may differ, with Fidelity running theirs in house and BlackRock using Coinbase and Anchorage, but either way the result is coins being locked up for the long term.
What this really shows is that demand for Bitcoin is flowing from both sides. Retail holders remove supply through self custody, while institutions do it through ETFs that appeal to traditional investors. Combine that with lost coins and long term holders, and the float keeps shrinking year after year. Instead of weakening the case for direct ownership, institutional accumulation makes it stronger, because scarcity only increases.