
By holding their own keys, Bitcoiners can hedge against centralization risks while reaping the benefits of Bitcoin adoption, Trezor’s Lucien Bourdon said.
Hardware wallet provider Trezor has highlighted the importance of self-custody in safeguarding Bitcoin holders against potential failures of centralized institutions as institutional adoption of the cryptocurrency continues to grow.
Institutional adoption is a great contributor to mainstream recognition of Bitcoin
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and price appreciation, but it still introduces certain risks, Trezor’s Bitcoin analyst Lucien Bourdon told Cointelegraph.
“Institutional involvement introduces centralization, with single entities holding large amounts of Bitcoin,” Bourdon said, adding that institutional adoption is associated with risks like volatility and negative sentiment if institutional investors face significant issues or even collapse.
Self-custody — or a method of holding crypto without relying on any third-party — is a long-term solution to possible centralized failures, Bourdon stated.
Holding Bitcoin is not the same as owning MicroStrategy or Bitcoin ETFs
Institutional adoption has enabled billions in corporate money to flow into Bitcoin through products like
Bitcoin exchange-traded funds (ETF), which saw $38 billion of inflows in 2024.
While Trezor doesn’t oppose institutional adoption, the firm still has a cautionary reminder that owning shares of MicroStrategy or Bitcoin ETFs is not the same as holding actual Bitcoin in self-custody.
“If these institutions encounter problems, investors relying on them may face losses without the protections self-custody provides,” Bourdon said, adding:
“Over the long term, those in self-custody remain insulated from these risks. By holding their own keys, Bitcoiners protect themselves from these vulnerabilities while still reaping the benefits of Bitcoin’s growing adoption and long-term value.”
Individuals hold the majority of the Bitcoin supply
While institutions and governments have been increasingly accumulating Bitcoin, individuals still hold the majority of Bitcoin supply, Bourdon said.
According to a CoinGecko report from 2024, governments collectively held around 471,000 BTC by the end of last year, accounting for just 2.2% of Bitcoin’s total supply.