Opinion by: Nic Puckrin, CEO of Coin Bureau
The great decentralization experiment that began with the creation of Bitcoin is being progressively domesticated; collared, tagged and rehoused inside the very architecture it was built to route around.
Wall Street’s wrappers and government rulebooks are metamorphosing a peer-to-peer (P2P) monetary network into a product line. The speed of that redomestication should unsettle anyone who still cares about the original ethos, and it should not be ignored anymore.
For years, the establishment laughed at Bitcoin…now it lists it.
The shift is purely for financial gain. It’s seen in the likes of spot exchange-traded funds (ETFs) and other traditional finance (TradFi) pipelines as cypherpunk money (and its ethos) convert into a fee machine for the world’s largest managers.
Consider the United States Bitcoin ETFs; they absorbed about $9 billion, proving that passive wrappers (not wallets) now drive growth. In the short run, it appears to be validation, but in reality, and in the long run, it resembles capture more closely.
Wrappers, gatekeepers, chokepoints
Buying a share of a trust is not acquiring a bearer asset, and since shareholders don’t hold keys…they don’t hold claims. Those claims are serviced by a small set of custodians and market-makers whose operational choices become de facto policy for millions of investors.
Then, when a single company sits at the center of most of the sector’s spot-ETF custody, the network’s practical censorship-resistance is functionally outsourced to one compliance program. Look toward centralized exchanges (CEXs) like Coinbase, which now serves as a custodian for over 80% of US crypto ETF issuers.
This is how centralization happens out in the open, where price discovery migrates from self-custodied markets to the closing auctions. In the US, spot-Bitcoin ETFs now command a large share of spot trading on active days.
Governance influence migrates from users to lawyers through prospectuses, while risk migrates from many small operational domains (like wallets or nodes) to fewer, larger ones.
It doesn’t start with a motive or sinister intent, just the math of convenience as it compounds over time. Consider Europe, where the Markets in Crypto-Assets (MiCA) regulation was sold as clarity — and in many ways is — yet the stablecoin regime exposes an awkward truth about cross-border fungibility and regulatory arbitrage.
Identifiably branded tokens can slosh across jurisdictions with uneven reserve standards, allowing narratives that preach “safety” to mask a new, centralized dependency on policymakers to fix gaps after scale arrives.
Related: Strategy adds $18M in Bitcoin on fifth anniversary of BTC strategy
Defenders of the ETF onslaught argue that this is how every asset class matures, but Bitcoin is in a class of its own; it’s a settlement network with monetary properties.
It isn’t just a line item to round out, and the more demand is intermediated through products that explicitly prevent self-custody, the more Bitcoin ceases to be a check on centralized power and instead becomes an annex of it. This trend challenges Bitcoin’s self-custody roots, and “number go up” will never be a sufficient trade for “rights go away.”
Make ETFs a bridge, not a cage
Fear not. There is a better path available.
Imagine the same billions of dollars rushing into wrappers, only this time paired with a self-custody norm. One where brokers on-ramp directly into wallets, institutions hold native assets and publish detailed proof-of-reserves (PoRs), and plan administrators default to multisig distributions.
It’s not that far-fetched an idea. What this would achieve is maturation consistent with the original ethos of Bitcoin — scaling without the need to surrender.
Currently, Bitcoin is being translated for Wall Street in ways that maximize returns while minimizing friction with outdated gatekeepers that are no longer truly needed.
When a single ETF complex dominates flows, a single custodian holds all the keys and a single regulator rewrites the terms mid-cycle, decentralization fades to dust. What is left in those ashes is a service-level agreement that effectively domesticates Bitcoin and everything it was made to achieve.
The mandate is simple: Treat ETFs as bridges, not cages. Flows should only be celebrated in headlines and by word-of-mouth if they fund the infrastructure that expands P2P liquidity and self-custody. Disclosures that quantify custodial concentration and censorship risks would be given by default.
The job now is to slip the leash of TradFi’s domestication and, politely (and persistently), release Bitcoin from centralizing inside the very institutions it started out trying to transcend. The time to genuinely decentralize Bitcoin is now.
Opinion by: Nic Puckrin, CEO of Coin Bureau.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.