One Reason Why ETF's are a Good Thing

Lots of people have been saying that ETF's are bad, because it centralizes a lot of the coin supply. Others argue that it's not really centralized, because people holding crypto in ETF's are individuals with their own decision-making power, rather than a single entity. The truth is probably somewhere in between. While the latter is correct (ETF holders making their own decisions), there is quite a bit of institutional and corporate ownership within the ETF's, so those individual ETF holders are more likely to be entities with larger stakes. Ie. an ETF may eventually have more whales than minnows.

But that's not the real benefit of ETF's. The benefit is that it's a relatively safe vehicle for someone with low confidence in their own technical competency. ETF's allow the investor to pass off the risk (and therefore cost) of self-custody on to a different and more competent entity. Blackrock is less likely to be scammed or to lose funds in a rug than a member of the general public. We've all said that one of the biggest problems with the crypto space is the prevalence of scams, and we need to do something about it. Agreed. This is one way.

If my elderly Luddite parents said that they wanted to set up an Exodus wallet and self-custody some BTC, I'd be terrified. I look at the explorer on their computer and I see things like "New folder (273)" for their latest photo album, and I die a little bit inside. They're barely able to add an attachment to an email. But if they said that they were going to call their broker and move 4% of their assets into an ETF through the brokerage, I'd think, "big brain move."

It's this safety factor, for a lot of people who don't have the technical savvy to hold assets on-chain, that is going to increase interest and exposure for crypto.

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