According to Cointelegraph, the launch of Bitcoin exchange-traded funds (ETFs) and other Bitcoin products for institutions is significantly impacting the core principles of cryptocurrency, initially envisioned by Satoshi Nakamoto. On-chain data shows a steadily declining trend in self-custody of Bitcoin since January 2024, coinciding with the approval of spot Bitcoin ETFs. This shift marks a notable change in investor behavior, as more individuals opt for institutional custody solutions like ETFs instead of managing their own wallets.
The creation of new Bitcoin addresses has slowed down after nearly 15 years of growth, with the number of active addresses dropping sharply from nearly 1 million in January 2024 to around 650,000 by the end of June 2025, a level not seen since 2019. Analyst Willy Woo noted that the growth rate of self-custody users has decreased since spot ETFs became available. This trend reflects the integration of Bitcoin into the traditional financial system, attracting more investors through BTC funds. However, some view this as a departure from Bitcoin's original purpose of personal sovereignty.
The launch of spot Bitcoin ETFs by companies like BlackRock, Fidelity, and Grayscale has been a significant moment for Bitcoin. These ETFs provide investors with regulated, institutional-grade access to cryptocurrency without the need to manage wallets, exchanges, or private keys. They also offer tax advantages and secure custody, along with the convenience of traditional brokerage platforms. Market demand for these products is very strong, with spot Bitcoin ETFs witnessing about $50 billion in net inflows in their first 18 months. BlackRock's IBIT leads the market, reaching $83 billion in assets under management by July 18, 2025, and holding over 700,000 BTC.
Bitcoin ETFs are not the only traditional gateway into cryptocurrency. Bitcoin treasury firms, holding Bitcoin as a strategic reserve asset, have evolved from a few high-conviction players into a larger institutional movement. By the end of Q2 2025, the number of publicly traded companies holding BTC had increased to 125, a 58% increase from the previous quarter. As of mid-2025, over 250 institutions, including publicly traded companies, private firms, ETFs, and pension funds, are holding BTC on their balance sheets. These treasury companies provide an indirect way to invest in Bitcoin, eliminating the need for self-custody or direct interaction with cryptocurrency exchanges while providing regulatory oversight and institutional-grade custody.
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