This is the core distinction many miss and I’m glad you’re calling this out.

A custodial balance or ETF share is a claim on Bitcoin, not Bitcoin itself. The protocol recognises only UTXOs controlled by private keys, not brokerage statements or fund disclosures.

Centralised custody concentrates risk, shifts price discovery to paper instruments, and recreates the same trust assumptions Bitcoin was designed to remove.

ETFs and treasury companies may increase exposure, but they do not strengthen the network’s monetary properties. Sovereignty, censorship resistance, and verifiability exist only at the protocol layer.

Bitcoin works best when custody, verification, and settlement remain distributed. Everything else is convenience layered on top, with trade-offs.