INSUBCONTINENT EXCLUSIVE:
Opinion by: Agne Linge, head of growth at WeFiDecentralized finance (DeFi) disrupting and outcompeting TradFi has long been the dream of
many innovators in the crypto field
crypto and treat it as a legitimate asset, a U-turn on its core principles of self-custody, permissionless access and borderless value
transfer is a big win for the industry
Crypto-based ETFs are simply centralizing what was built to resist centralization.Spot crypto ETFsThe advocates of crypto-based ETFs have a
convincing case for the adoption of these instruments
Market-traded ETFs open the doors for a whole new class of investors, previously reluctant to put their money into crypto due to the lack of
regulations and technological barriers to understanding the crypto infrastructure
Ease of access and process streamlining are the main selling points of spot crypto ETFs, allowing for a familiar way to diversify into new
assets through a brokerage account instead of real ownership
For many, crypto ETFs represent a gateway into digital assets and a version of crypto that feels safer, simpler and more aligned with
Hong Kong operates a unique, in-kind ETF model, mandating actual crypto backing and allowing customers to deliver or receive the underlying
coin in exchange for the ETF shares
It is drastically different from the US cash-based model, which requires the creation and redemption of ETF shares to be processed in US
equivalent to ownershipSpot ETFs are an attempt to normalize crypto and make it conform to the architecture of TradFi
Holders of ETF shares face custodian risks, entrusting third parties with assets meant to be held directly
the underlying asset due to higher trading costs or system inefficiencies
These problems are endemic to TradFi, and DeFi was supposed to solve them
Instead, ETFs trap crypto inside the very financial cage it was meant to escape
Investors get exposure but lose empowerment
Major TradFi players are rapidly amassing BTC and Ether (ETH) holdings, crowding out crypto asset managers, with BlackRock iShares Bitcoin
Trust seeing almost $5 billion amid outflows from other players
For ETH and Solana (SOL), which are on track to get their own ETFs approved, large centralized players could create chokepoints in the
proof-of-stake confirmation mechanism, potentially cracking the ecosystems
lack the ability to participate in governance voting, staking to earn yield and income-generating DeFi protocols
The ETF-caused concentration essentially hands the institutions control over some ecosystems, allowing them to dictate their conditions and
impose their decisions onto the wider community.Convenience at the cost of ethosSpot ETFs fundamentally miss the point of crypto
The beauty of DeFi lies in self-custody: the idea that individuals should hold their assets, control their keys, and operate free from
That is the reason and the foundation for the scale of innovation in the crypto industry today
ETFs sell exposure to BTC and ETH (and other altcoins in the future), but simple price fluctuations do not constrain the value of crypto
DeFi promises a better financial system, but without agency and community engagement, it will never reach this goal.Yes, ETFs are convenient
Yes, ETFs have more oversight
And yes, ETFs managed by well-known firms such as BlackRock and Fidelity might give retail investors a feeling of safety and transparency
Direct ownership protects the financial freedom of individual owners, unlocks additional income streams, and keeps innovation and
improvement going through community participation
regression.Opinion by: Agne Linge, head of growth at WeFi.This article is for general information purposes and is not intended to be and
should not be taken as legal or investment advice
