Bitcoin self-custody protects. By holding their keys, they can hedge against such concentration risks while enjoying the benefits of Bitcoin adoption, according to Trezor’s Lucien Bourdon. Trezor, a hardware wallet provider, has underlined the relevance of self-custody, which is saving Bitcoin without relying on third parties, as a way to protect holders from a still-maturing institution of Bitcoin adoption.
Bitcoin is becoming more widely recognized, thanks to institutional adoption! Which is a good thing, yet the practice should involve some risk, Trezor’s Bitcoin analyst Lucien Bourdon told Cointelegraph.
“Institutional adoption also comes with risks such as volatility and negative sentiment if institutional investors encounter big problems or collapse. Institutional adoption implies centralisation, with single-entity holders of large amounts of Bitcoin,” Bourdon said.
Holding Bitcoin is not the same as owning MicroStrategy or Bitcoin ETFs
From Bitcoin exchange-traded funds (ETFs), which accumulated $38 billion of inflows in 2024, institutional adoption has paved the way for hundreds of millions of corporate dollars to stream into Bitcoin.
Although Trezor has no objection to institutional adoption, the company offers a cautionary reminder that owning shares in MicroStrategy or Bitcoin ETFs is not equivalent to personal, self-custodial ownership of Bitcoin.
“If these institutions run into issues, investors using them could lose money without the protection that self-custody affords,” Bourdon said, adding, “Over the long term, those in self-custody remain insulated from these risks.
By holding their keys, Bitcoiners protect themselves from these vulnerabilities while still reaping the benefits of Bitcoin’s growing adoption and long-term value.”
Bitcoin self-custody protects. Individuals hold the majority of the Bitcoin supply
The Bitcoin supply has been increasingly concentrated among institutions and governments, but the majority of people still hold Bitcoin, Bourdon said. Between 2022 and 2023, CoinGecko reported that governments worldwide had amassed an estimated 471,000 BTC for a combined holding of only 2.2% of Bitcoin’s total supply at the end of last year.
Dynamic highlights Bitcoin’s decentralized ethos, Bitcoin self-custody protects.
That kind of distribution leaves governments “playing catch-up,” the analyst said, noting that this dynamic highlights Bitcoin’s decentralized ethos, where power is distributed among individuals as opposed to being centralized among institutions. There can be positives in state adoption, including fiscal discipline, transparency, and economic growth,” he said. But the strength of bitcoin resides in its ability to give power to the many, not the few,” he said.
Bourdon also pointed out that this is just a small step in the history of Bitcoin adoption, and in the case of state adoption, all signs are that, at least in the United States, governments have not learned to distinguish between Bitcoin and other coins either.
Trezor calls to “ignore the noise” and focus on Bitcoin independence.
Self-custody enables users to store their assets (e.g., Bitcoin) independently, but there is at least one key drawback associated with it: users must assume full responsibility for storing their private keys. When a private key is lost or stolen, users have no mechanism to get their assets back.
Nonetheless, the self-custody trend has been booming, with the self-custodial Trust Wallet seeing record downloads last year and Trezor reporting record demand amid record BTC price highs.
To commemorate Bitcoin independence
To commemorate Bitcoin independence and financial sovereignty, Trezor is launching a limited hardware wallet edition known as Trezor Safe 5 Freedom Edition.
Under the slogan “Independence isn’t given—it’s taken,” Trezor’s Freedom Edition will be launched with a total of 2,100 devices available from Jan. 30. “As history has shown, Bitcoin outlasts crises and distractions,” Bourdon said, adding, “The best way forward is to secure your wealth, ignore the noise, and trust in the power of sound money to offer stability and independence.”