Bitcoin News Today: Bitcoin Self-Custody Declines 20% Since January 2024 as ETFs Gain Traction

Bitcoin exchange-traded funds (ETFs) and other institutional Bitcoin products are reshaping a core crypto ethos rooted in Satoshi Nakamoto’s original vision. Onchain data indicates that Bitcoin self-custody has been steadily declining since January 2024, the same month Bitcoin spot ETFs were approved. This decline signals a major behavioral shift as more investors opt for institutional custody solutions like ETFs instead of managing private wallets.

After nearly 15 years of growth, the creation of new Bitcoin (BTC) addresses is slowing down, while active addresses have dropped sharply from nearly 1 million in January 2024 to around 650,000 in late June, reaching levels not seen since 2019. This 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.

The launch of spot Bitcoin ETFs by companies marked a turning point for Bitcoin. These 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, with spot Bitcoin ETFs seeing around $50 billion in net inflows within the first 18 months. By July 18, 2025, one of the leading ETFs had grown to $83 billion in assets under management, tripling in just 200 trading days. It now holds over 700,000 BTC, nearly 100,000 more than another major ETF.

Bitcoin ETFs aren’t the only traditional gateway into BTC. In recent years, Bitcoin treasury companies — businesses or investment vehicles that hold Bitcoin on their balance sheets as a strategic reserve asset — have evolved from a handful of high-conviction players into a broader institutional movement. The number of public companies holding BTC increased to 125 by the end of Q2 2025 — a 58% surge from the previous quarter. As of mid-2025, over 250 organizations, including public companies, private firms, ETFs, and pension funds, now hold BTC on their balance sheets. Bitcoin treasury companies offer holders an indirect way to invest in Bitcoin without managing private keys or dealing with crypto exchanges. Like ETFs, they eliminate the need for self-custody or direct interaction with crypto exchanges, while providing regulatory oversight and institutional-grade custody.

The rise of ETFs further challenges Bitcoin’s self-custody roots by providing a more accessible and regulated way to invest in the cryptocurrency. For many traditional users, there are still barriers and concerns about directly purchasing and hosting cryptocurrencies. ETFs solve this problem by allowing investors to gain exposure to Bitcoin without the need for self-custody, making it a more attractive option for those who prioritize convenience and regulatory compliance.

The evolution of Bitcoin from a passive asset to a usable financial tool is a significant development in the cryptocurrency landscape. As technological innovations continue to unlock new use cases and ETFs provide a more accessible investment option, Bitcoin is poised to play an increasingly important role in the global financial system. The integration of Bitcoin into the broader financial ecosystem, while challenging its self-custody roots, also opens up new opportunities for growth and adoption.