The rise of Bitcoin exchange-traded funds (ETFs) and other institutional Bitcoin products may be reshaping a core crypto ethos rooted in Satoshi Nakamoto's original vision . According to onchain data, Bitcoin self-custody has been steadily declining since January 2024 — the same month Bitcoin spot ETFs were approved .
After nearly 15 years of growth, the creation of new Bitcoin addresses is slowing down, while active addresses have dropped sharply from nearly 1 million in January 2024 to around 650,000 in late June 2025, reaching levels not seen since 2019 . According to on X analyst Willy Woo, the growth rate of self-custody users has been in decline since spot ETFs became available .
The trend is part of Bitcoin's natural integration into the traditional financial system as more investors join the crypto space via BTC funds . For others, however, it marks a departure from individual sovereignty and Bitcoin's original purpose . A community member wrote on X that ETFs didn't steal users from cold storage, they opened the market to those who were locked behind compliance walls .
The launch of spot Bitcoin ETFs by companies like BlackRock, Fidelity and Grayscale marked a turning point for Bitcoin . The ETFs gave investors regulated, institution-grade access to the cryptocurrency, without the need to manage wallets, exchanges or private keys . The funds also offered tax advantages and promised secure custody, along with the ease of traditional brokerage platforms . Market demand was strong from the start .
Within the first 18 months, spot Bitcoin ETFs saw around $50 billion in net inflows, with BlackRock's IBIT leading the pack at $83 billion in assets under management by July 18, 2025 .
Bitcoin ETFs are exchange-traded funds that track the value of Bitcoin and trade on traditional market exchanges . They allow investors to invest in Bitcoin without having to go through the hassle of using a cryptocurrency exchange . The existence of a cheaper and easier way to trade Bitcoin doesn't make the digital coin a buy, only cheaper and easier to do so . So crypto ETFs are a good way for traders to play Bitcoin or Ethereum, especially if it helps them avoid dubious crypto exchanges .
Spot Bitcoin ETFs make it easier for traders to take a stake in the digital currency using just their traditional broker . These funds may well open up Bitcoin to wider acceptance as a store of value and push up the price of the cryptocurrency even more .