Imagine: BlackRock's IBIT ETF has acquired 2 million bitcoin on behalf of its users. Bitcoin reaches gold's market capitalization of $20 trillion — that's about $1M per bitcoin. BlackRock's ETF would represent 10% of that value, or $2 trillion . That's $2 trillion of value on balance sheets of companies all over the world. Now imagine we discover that BlackRock cannot sell back that bitcoin because its custodian cannot perform the signatures required to move the keys. BlackRock loses $2 trillion, and all of their customers have to write down 100% of that value on their balance sheets. Poof. The world that understands BlackRock knows very little about their custodian, Coinbase. The problems w...
From: Bitcoin Custody Requires a Higher Understanding of Tradeoffs