That’s true about the ETFs, but the important part is that the demand is still ending up in Bitcoin itself. Whether people choose to hold it directly or through a brokerage account, BlackRock and Fidelity still have to go into the open market and secure real coins to back those products.
Even if the end users never touch a seed phrase, the effect on supply is the same. Fewer coins available for those who want to self custody. For retail investors who do understand Bitcoin, this is exactly the time to focus on holding it directly. Every sat you self custody is one less sat that can be soaked up by institutions offering paper exposure.
The way I see it, ETFs might be convenient for traditional investors, but they do not change the fundamentals. Scarcity is still scarcity, and the more coins locked up by giants like BlackRock, the more valuable self custodied Bitcoin becomes in the long run.
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.
Investors, unlike traders, tend to hold onto their investments for a long time, especially if the price of that particular position continues to go higher. Also, a lot of these Bitcoin ETFs are in self-directed retirement accounts that will be held for many years, likely decades - adding to the reduced supply of available Bitcoin.
BTW, Fidelity self-custodies their Bitcoin in-house unlike Blackrock, who uses both Coinbase and Anchorage as custodians.
The moment Bitcoin is acquired, whether by an individual stacking quietly into cold storage or by institutions like Blackrock and Fidelity scooping up large amounts for ETFs, those coins are effectively removed from circulation…. The end result is always the same scarcity. And with Bitcoin, scarcity is the heartbeat of its value proposition.. Unlike traditional assets that can be inflated or printed, every coin taken off the market makes the remaining supply more wanted..
What really makes the ETF interesting is the type of holders behind it.. Traders will always flip back and forth depending on price swings, but investors inside these retirement structures are different. These are positions that could sit untouched for decades. Imagine millions of Bitcoin locked away in accounts that people can not or won’t be touched until retirement, that is a whole layer of supply essentially frozen. The longer that dynamic holds, the stronger the floor gets for Bitcoins price over time..
Another point people sometimes overlook is the signal this gives to the wider world. When institutions like Fidelity go as far as self custodying their Bitcoin, it is not just about storage, it is a statement that this asset is here to stay…. It adds legitimacy and trust for people who may have been on the sidelines. And that trust often pulls in even more demand, which again increases the scarcity issue..
So in the end, whether it is one guy stacking $20 worth of sats every week or a trillion dollar firm parking thousands of BTC in their ETF, the math is the same, fewer coins available, stronger scarcity, and a higher likelihood of upward price pressure…