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I am playing with feelings today. It feels a lot better/safer to go into your investment platform and hit buy on IBIT than to go on Coinbase and hit buy on BTC. I wonder how many people feel uncomfortable keeping their stuff in Coinbase and are just deciding to sell over there and buy in their investment platform.

Their BTC is still at Coinbase. They are selling to themselves. Not much else has changed. But people now have a peace of mind that wasn't there before. The expense ratio is seen as "worth it".

Is this more centralizing? Sure. But can you blame them? No.

Let's just hope one day self-custody solutions can create the same safety feelings these custodial companies do. Right now they are no match for it.

PS: Yes, I know, self-custody is better and safer. But that doesn't mean that it FEELs that way.

NotBiebs and 69 others 1y ago

Doesn’t feel safer to me. Cause even though Coinbase sucks, but I still know I have the possibility to withdraw the bitcoin to self custody or another custodian at any time.

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Discussion

Vitor Pamplona 1y ago

Makes sense. But I don't see people thinking on that possibility if they have already left BTC live on Coinbase.

People either buy on Coinbase with a plan to take it out at some point or leave it there forever. There is no mindset transition between the two that I could find among friends.

And investment platforms also offer that transition to another investment platform. It doesn't change the Custody in the way we know it, but people think it's the same thing.

NotBiebs and 69 others 1y ago

Most of the ETFs custody their bitcoin with Coinbase, so there’s an extra layer of counterparty risk. I dunno about anyone else, but that definitely does not feel safer to me.

Vitor Pamplona 1y ago

Their investment platforms are already full of counter-party risks. So, that doesn't trigger anyting with them.