Many of us will also get bothered by people thinking that they are investing into bitcoin, but they are investing into ETFs or they are holding their bitcoin on exchanges, and sure for all intents and purposes, we might be able to concede that even derivative products will still give price exposure, so third parties holding the BTC is ONLY going to negatively impact when there is some kind of bankruptcy or rug pull event.. and we saw quite a few of those in 2022 with FTX and some of the other culprits that ended up going under during that time, starting out with Tera luna that likely did not have as many bitcoin as they claimed to have had, but they were defending a supposed algorithmically stable coin that was supposedly backed by supposed real bitcoin.
My experience investing in shitcoins is a bad one, so I will rather stay with Bitcoin and not allow greed make me repeat the same mistake. I was unfortunate to be those who lost money from Tera Lun, an experience I consider one of my greatest nightmares of my life because I watched my money dropped to zero within few hours. Those who have not had such experience will never understand why some of us decided to pitch tent with Bitcoin and Bitcoin a lone. Even if I want to look at anything else, it will be with fear and doubts but my confidence and greater part of my resources will remain with Bitcoin.
I shear thesame experience with you too, at first shitcoins look so real to be true to me, infact I thought i will become rich someday from it. I thought it will be the new Bitcoin hoping that one day It will be the subsidiaries of Bitcoin. but not knowing that shitcoins as it name implies will forever be shit.. after so many months of buying different of it and hoping one will pump so high, I desicoverd that instead of it to grow it kept decreasing till it all disappeard in my wallet i.e rug pull. I wanted to invest in Luna back then before it fell but I thought I escaped it not knowing that the one I was accumulating is even the worst nightmare. Sometimes when I remember the amount of Bitcoin I would have accumulated with those money I used for shitcoin back then, I keep regretting. But however I am glad I came into realization that Bitcoin is the altimate, and non can be compeard to it in this ecosystem or space.
Indeed while it may seem convenient to gain exposure to BTC through derivatives or ETFs there are certain risks associated with it especially if you don t trust the financial health of the institution or exchange. As you mentioned the collapse of FTX and the crash of Tera Luna in 2022 showed us that putting your assets on a centralized platform can directly put your assets at risk. In the case of Tera Luna the reliance on algorithmically stabilized currency and the lack of adequate back up led to users assets being destroyed in a matter of hours. Such incidents are a huge lesson for ordinary investors.
The experience of shitcoins and other high risk altcoins is also relevant here. It may seem that they can initially offer big returns but the reality is that the value of most shitcoin projects is generally speculative and highly volatile. As you said some coins increase in value due to initial hype but the long term sustainable growth is low. In such situations ordinary investors suffer losses and many feel that they themselves have been victims of a kind of rug pull or pump and dump scheme.
Your experience is an important lesson for new investors: the temptation of speculative projects can be great but for long term stability it is crucial to focus on core trusted assets. By holding BTC volatility can be managed and the chance of falling to zero is reduced.
One thing to note is that this is not only financially; it also gives peace of mind from a psychological perspective. If someone constantly leans on short term high risk coins it increases mental stress and anxiety. An established asset like Bitcoin provides long term confidence and risk mitigation.