Would you consider an ETF if you had loads of Bitcoin

 
 
Good morning/evening


Following on from my last post about whether to sell the house and invest those funds into Bitcoin, that also brings with it another question. Do we trust someone else to hold our Bitcoin/Assets for us (via an ETF)? Or do we store it ourselves, take the keys, and take the risk? It is a bit different holding some Bitcoin in a self custody hardware wallet compared to what would be, almost everything I own!
 
 
What is a Bitcoin ETF
An ETF (exchange-traded fund) is a traditional investment model that’s been applied to bitcoin. Instead of you buying and holding actual bitcoins, you buy shares in a fund that claims to hold bitcoin (or track its price). It trades on a regular stock market, you buy via your broker.
One key difference: you’re not storing the private keys. You’re trusting the fund, the custodian, the chain of custody behind the scenes.
For some people that’s exactly what they want, simplicity, lower technical skills needed and not having to worry about self custody risks.
 

 
The appeal of self custody
Then there’s the other camp, you buy bitcoin, you hold your own keys, you are your own bank. Then there is the mantra of not your keys, not your coins 
and what you gain is full control. You control when you send it, how you store it, whether someone else can freeze or access it. You ultimately trust only yourself, which is not always easy and you have to accept responsibility. if I lose my seed phrase or my hardware wallet fails I have no one to call and no support ticket!

 
Comparisons between the two options

• ETF. Buy it like a stock. Doesn’t require hardware wallets, seed phrases, verifying backups. For someone who’s just dipping a toe into crypto, it’s inviting.
• Self custody. Requires setup. Choosing a wallet, securing keys, thinking about backups, maybe even multisig. Not totally trivial.
• ETF. You don’t own the underlying bitcoin directly. You own a financial vehicle.
• Self custody. You hold the actual bitcoin (via your keys). You decide when you transact. You hold the asset in its pure form.
• ETF. Has management fees. Annual costs. Also subject to stock market hours (for some jurisdictions) rather than 24/7 crypto market.
• Self custody. Once you’ve set things up, ongoing costs are minimal (hardware wallet, maybe some backup). And you can transact whenever (in most cases) because bitcoin is 24/7
• ETF. You introduce counterparty risk: fund manager, custodian, broker, regulatory environment. Many hands handle your asset. If one fails… you might be exposed.
• Self custody. You eliminate many of those 'middlemen' risks, but you take on the personal risk. If your house burns down and you didn’t backup properly? If you forget your seed? You’re done.

There is also the Bitcoin fork risk and the Bitcoiners are divided, even about the chances of a fork and whether it may even happen. Now if you hold an ETF there is a lot of jargon surrounding the possibility of a fork but what it is basically saying is they will choose which road to follow, so to speak. So again you have lost control in the process and have no choice.
 
A Step backwards
 
I started with convenience and ease. mined Helium, and dabbled in crypto using Centralized exchanges.. But the more I learnt, the more I moved away from CEX's into DEX's and self custody. To move from that, into an ETF seems like a step backwards if I am honest. 
 
Maybe there’s no “one right answer” for every person. some in self custody (core position), maybe a slice via an ETF (for convenience/liquidity), especially for just a part of the portfolio.

Practical things to consider

• How comfortable are you with losing access if you mess up your keys?
• How much value are you putting in bitcoin? big enough that you need more stringent protection, multi sig, multiple hardware wallets.
• Do you want to use bitcoin or purely invest? ETF leans to investment only. Self custody unlocks usage or trading.
• Inheritance planning, not fun but essential really!
• Are you okay paying annual fees?

 
As you may well have understood, I am of two minds here and I am fortunate enough that I even have the choice, I can continue as I am, receive a monthly income and invest smaller amounts or sell up, have no regular monthly income but have more to invest. Holding a considerable amount of Bitcoin has it's own risks too. I would be new to the actual stock market, whilst still learning in crypto.
 
There is also one more important thing to consider that Igor kindly brought up in the comments, and that is emotion. Is the fact that I would even consider selling the house to buy Bitcoin because I love that asset and am emotional about it, everyone knows you are not supposed to love your bags, but it is difficult to remove that emotion. Bitcoin may have served me well so far but anything could happen. Then the other mantra...Don't invest more than you can afford to lose, yes no one likes to lose money and if my whole crypto portfolio was to go to zero tomorrow, I could still carry on as I have that monthly income, if I was all in (even with some diversification in stocks) and something awful happened, there would be no fall back option. I have probably also talked myself out of considering an ETF, but that is part of the appeal of writing for me, it is my thoughts, my progress and wins and losses all there in black and white.
 
Conclusion
 
Honestly, there isn't one, I am still undecided but on the plus side I think I have talked myself out of the ETF part, as for sell or not sell, I am still not sure but the good thing is I do not have to hurry to make a decision, the house can continue as a rental for as long as I like. One thing I am sure about though is once I get my private pension, the lump sum part of it is ear marked for...........Yes that will definitely be for investments. I just have to wait 18 months! I am old, but not THAT old!
 
As always thank you for reading and please feel free to comment.