Gold bug Peter Schiff has highlighted a problem with owning spot bitcoin exchange-traded funds (ETFs). However, the issue Schiff pinpointed isn’t unique to bitcoin ETFs. This discussion has reignited calls for self-custody among crypto proponents.
Peter Schiff’s Warning Prompts Self-Custody Push
Gold advocate and economist Peter Schiff has highlighted a problem with owning spot bitcoin exchange-traded funds (ETFs). He wrote on social media platform X Tuesday:
One problem with owning bitcoin in an ETF is that liquidity is limited to U.S. market hours. So if the market crashes overnight, you have no ability to sell until the U.S. market opens for trading in the morning. Very frustrating to watch helplessly with no ability to get out.
Schiff’s statement came after the price of bitcoin dipped earlier this week. The gold bug shared on X Monday: “The more bitcoin that moves into ETFs, the more vulnerable bitcoin becomes to a catastrophic crash. That’s because ETF buyers are more likely traders than true believers. So if bitcoin is going up they’ll go along for the ride. But once it enters a bear market, they’ll bail out.”
When the liquidity of physical gold is questioned, Schiff replied: “Gold doesn’t crash overnight like bitcoin. So there is nothing to worry about.”
Many people commented on Schiff’s post. Bloomberg ETF analyst James Seyffart pointed out that the issue Schiff raised with spot bitcoin ETFs applies to other ETFs as well, including gold ETFs. The analyst detailed on X:
This isn’t new though or exclusive to bitcoin. Gold ETFs? Same thing. Any commodity ETF. Yup. International equity ETFs. Same deal. Even stocks that have market moving events occurring after market hours or during the weekend is pretty similar.
A number of bitcoin proponents responded to Schiff’s post by emphasizing the importance of self-custody and buying BTC directly instead of through ETFs.
Simon Dixon, CEO and co-founder of Bank To The Future, replied to Schiff: “True. Plus no ability to buy bitcoin ETF when the market is closed. Moral of the story is to own real bitcoin if you can. It’s a lot easier than owning real gold without a custodian.” Entrepreneur Bryce Clark opined:
You know Peter Schiff brings up a good point here, you really should self custody your crypto, stop letting third parties hold it. Great advice and thanks for the warning Peter.
Dave Weisberger, an advocate of digital assets for economic freedom, wrote: “Unwittingly, Peter provides another reason why the world’s analog asset markets WILL go digital… 24/7, multi-currency markets, with on-demand settlement, using on-chain value stores as the unit of account ARE superior & will be adopted.”
Source: Bitcoin
