Bitcoin ETF vs Self-Custody: Fees, Access & Security Compared

TL;DR: Self-custody vs bank bitcoin

• When you buy bitcoin through a bank or ETF, you're trusting a 3rd party with an asset that is designed to be trustless -- and history shows how risky that can be

• Bitcoin ETFs charge you 0.3-2.0% annually just to NOT hold your own bitcoin -- like paying rent on your own money

• Self-custody means you have access to your bitcoin anywhere, anytime, without asking permission -- ETFs lock you into banking hours and bureaucracy

Ready to take control of your bitcoin?

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Real bitcoin vs paper bitcoin

There is a HUGE difference between self-custody bitcoin and buying bitcoin through a bank via products like ETFs (AKA captured bitcoin).

One gives you actual control. The other gives you a fancy IOU.

Custody at a bank or brokerage

When you buy a bitcoin ETF through your broker, here's what actually happens:

You give them money. They give you shares. That's it. You don't own bitcoin. You own shares in a fund that (hopefully) owns bitcoin. ⁠And where is their bitcoin? Almost certainly held with a custodian.

Let’s think about that for a second.

“Your bitcoin” is actually:

• Shares in a fund

• That holds bitcoin on an exchange (~90% of ETFs use Coinbase)

• Which is just another company that could fail

• And you pay 0.3% to 2.0% every single year for this privilege?!

That's FOUR (4) different entities between you and "your" bitcoin -- the broker, the fund manager, the custodian (eg. Coinbase), and the regulators who could freeze it all tomorrow.

And what if any one of them fails, gets hacked, or decides you're a "risk"?

Your balance could vanish overnight, leaving you with little practical recourse.

And the fee math doesn’t lie

A 1.5% annual fee doesn't sound like much, right?

But ask yourself: why pay rent on your own money?

That's what ETF fees are -- rent. ⁠Every year, forever.

Whether bitcoin moons or crashes, they take their cut.

Tired of ‘paying rent’ on your bitcoin?

Self-custody with Bitcoin Well today →

No annual fees. Just you and your bitcoin.

True self-custody

Let's talk about REAL ownership.

When you hold your own keys, you hold actual bitcoin. 

Not shares. Not IOUs. Not promises. 

Real bitcoin.

Here's what self-custody looks like:

• Private keys: These are like the password to your bitcoin -- except they're mathematically unbreakable

• Hardware wallets: Physical devices (think fancy USB sticks) that keep your private keys offline and safe

• Single-sig vs. multisig: Single-sig is like one key to your house. Multisig is like needing 2 out of 3 keys -- more secure without a single point of failure

The best part? Once you set it up (which only takes a few minutes), you're done. No annual fees eating away at your stack.

Convenience? Myths vs. reality

I can tell what some of you are thinking...

"But buying bitcoin through my bank is so much easier!"

Is it though? Let's bust some myths.

"I can withdraw anytime"

Reality check:

• Stock market hours only (only ~20% of the week!)

• T+2 settlement (wait 2 days for your money)

• Can't withdraw bitcoin -- only cash, which is a guaranteed taxable event

• Weekend emergency? Too bad, market's closed

With self-custody, I can send bitcoin to my family in Australia at 3AM on Christmas. ⁠

Try doing that with an ETF.

"The bank is safer"

Oh boy. Where do I start?

Remember these ‘feel-good' stories?

• Prime Trust (2023): Nevada crypto custodian goes belly-up, user funds frozen

• Canadian Truckers (2022): Government froze bank accounts of protesters and donors

• Cyprus (2013): Banks literally took 47.5% of large deposits to "save themselves”

What happens when the next "emergency" freezes YOUR account?

Secure your wealth with Bitcoin Well →

Self-custody: unseizable, unfreezable.

"Fees are negligible"

Here's what "negligible" looks like:

• 1% of 1 bitcoin today: ~$1,000

• 1% of 1 bitcoin if it hits $500k: $5,000

• 1% of 1 bitcoin if it hits $1M: $10,000

Every. Single. Year.

“Negligible” certainly adds up, doesn’t it?

A hardware wallet is a one-time cost of ~$100.

No annual fees. No subscriptions. 

Case studies: when custody fails

Let's look at some real-world custody disasters.

These aren't hypotheticals -- they actually happened.

2022 Canadian Trucker Convoy

What happened: The Canadian government didn't like the protests, so they froze bank accounts. Not just protesters -- donors too. Send $50 to support truckers? Account frozen.

Lesson: Unfortunately in "liberal democracies," your bank account can be frozen in an instant if the government disagrees with what you’re doing with YOUR money.

Prime Trust (Nevada, 2023)

What Happened: "Regulated" crypto custodian put into receivership. Customer withdrawals? Halted indefinitely. Your bitcoin? Good luck getting it back.

Lesson: "Regulated" doesn't automatically mean "safe." In many cases, it means they loosely follow rules while losing your money.

Cyprus Bail-In (2013)

What Happened: Banks in trouble? No problem! Just take up to 47.5% of customer deposits. Call it a "bail-in" instead of theft. Problem solved!

Lesson: In the bank's eyes, your deposits are their liabilities. When things get tough, guess who loses?

What’s the takeaway?

Each story teaches us the same thing.

When you don't control the keys, you don't control the outcome.

So, are you ready to control your keys?

Secure your stack NOW with Bitcoin Well →

Setup takes 20 minutes. Control lasts forever.

Freedom & finality: the self-custody edge

Why the bank’s 9-to-5 model can’t match bitcoin:

24/7 global settlement

Banks: "Sorry, it's Saturday. Try again Monday. Oh, and that'll be 3-5 business days plus a $30 wire fee."

Bitcoin: Send any amount, anywhere, anytime. Settlement in 10 minutes. Fees usually under $1.

Sovereignty & censorship resistance

Ever had a payment blocked? Credit card declined?

Account frozen for "suspicious activity" (aka buying bitcoin)?

With bitcoin in self-custody:

• No one can freeze your account

• No one can reverse your transactions

• No one can tell you who you can or can't pay

• No one can debase your savings by printing more

Portable wealth in an era of capital controls

Picture this: You need to leave. Fast.

Political instability. Natural disaster. Whatever.

Traditional wealth: Good luck moving your 401k, real estate, or bank accounts across borders quickly.

Self-custody bitcoin: Memorize 12 words. Cross any border with your entire net worth in your head.

(Not that I'm suggesting anything. Just saying... options are nice.)

So -- will YOU be ready when it matters?

Borderless wealth with Bitcoin Well →

Because "too late" comes without warning.

The "I'll lose my keys" fear

"But what if I lose my keys?"

Fair question. 

But here's the thing -- it's 2025, not 2013.  We've solved this long ago.

Beginner-friendly hardware

Gone are the days of complicated setups. Modern hardware wallets are stupid simple.

Top Picks for Beginners:

• Passport: Made by Foundation; air-gapped, camera-driven security that keeps your bitcoin completely offline.

• Jade: Made by Blockstream; one-scan QR signing makes holding your own bitcoin feel as simple as using any mobile app.

• Bitkey: Made by Block (Jack Dorsey's company); multisig, user-friendly, designed for total beginners.

All support passphrase protection (like a 25th word to your seed phrase) and have device recovery that actually makes sense.

Setup takes 20 minutes. My 64-year-old mom did it. You can too.

Multisig: extra protection

Still nervous? Try multisig -- it's like having multiple locks on your door.

How 2-of-3 multisig works:

• You need 2 out of 3 keys to move bitcoin

• Keep one key at home, one in a safe deposit box, one with a trusted family member

• Lose one key? No problem, you still have two

• Someone steals one key? They can't do anything without a second

It's basically impossible to lose your bitcoin with a proper multisig setup.

And way more secure than trusting an ETF or Coinbase.

Estate planning (the part nobody talks about)

What happens to your bitcoin when you die?

Bad news: If you don't plan, your bitcoin dies with you.

Good news: Estate planning for bitcoin is actually pretty straightforward:

• Seed phrase splitting (give parts to different people)

• Sealed instructions with your will

• Professional services like Casa or Unchained Capital

(We'll do a deep dive on bitcoin inheritance soon. It's important stuff.)

What hands-on pros are saying

Caitlin Long (Wall Street veteran, Custodia Bank CEO):

"When you don't control your private keys, you don't truly own your coins. You simply rely on someone else's goodwill and consciousness to store your money for you."

She's seen enough Wall Street mishaps to know -- counterparty risk is real.

Jameson Lopp (Casa CTO, Cypherpunk):

"A lot of people out there who don't do self-custody don't realize how easy it has become."

The guy who literally writes the book on bitcoin security says it's gotten easy.

So… what's your excuse?

The ‘OG’ Bitcoin Wisdom:

"Not your keys, not your coins."

This isn't just a catchy phrase. It's the foundational truth of bitcoin.

Everything else is just varying degrees of IOUs and trust.

Ready to start?

Bitcoin Well makes it simple → 

Don’t wait. Take control now.

Quick-start checklist

Alright, enough talk. Here's your action plan:

• Buy a hardware wallet (Passport, Jade, Bitkey -- they all work)

• Move a test amount (Start with less than $100. Get comfortable)

• Verify the receiving address (ALWAYS do this)

• Back up your seed phrase (Write it down -- never digital)

• Test recovery once (Wipe the device, restore from seed -- proves your backup works)

• Send the rest (You're comfortable. The back-up works -- it’s go time!)

Congratulations -- you now have better monetary sovereignty than 99% of humans in history.

Frequently Asked Questions

"Do I need to be tech-savvy to self-custody?"

Absolutely not. If you can use a smartphone, you can self-custody bitcoin. The "it's too technical" excuse died in 2018. Modern hardware wallets are designed for normal everyday people, not hyper-technical computer nerds.

"What if my hardware wallet maker goes bankrupt?"

Doesn't matter! Your bitcoin isn't stored on the device -- it's on the blockchain. Your seed phrase works with any compatible wallet. Foundation (maker of Passport hardware wallet) goes under? Import to a new wallet. Done.

"What if the government bans self-custody?"

Then you'll be really glad you already have it. Look at history -- governments don't announce bans in advance. They happen overnight (see: Executive Order 6102, India's cash ban, China's crypto crackdowns). By the time a ban is announced, exchanges are frozen and it's too late. 

The time to self-custody is NOW, while you still can.

"How do taxes work when I self-custody?"

Same as ETFs -- you owe capital gains when you sell. The difference? With self-custody, YOU decide when to create taxable events. Not your broker. Not the government. Only you.

(Not tax advice -- talk to a real accountant. But the options are nice.)

"What happens if Bitcoin Well goes out of business?"

Well that’s not happening any time soon 😉 but let's entertain the hypothetical.

Here's the beautiful thing about self-custody -- it literally doesn't matter! Once your bitcoin is in your hardware wallet, it's yours forever. Full stop. No company on Earth (including us) can touch it. We could vanish into thin air tomorrow and your bitcoin would still be sitting in your wallet, safe as ever.

Said differently: if Bitcoin Well vanished right now. No warning, no notice, servers unplugged and all access gone. There would be 0.00000000 BTC of customer funds lost. Exactly zero. 

Try getting that guarantee from your bank, ETF, or exchange. (Spoiler: you won't)

The choice is yours

Look, we get it. ETFs feel safe. Familiar. Easy.

But ask yourself:

Do you want to own bitcoin? Or do you want someone else to own it for you?

History is littered with people who trusted institutions with their wealth.
Ask them how that worked out.

The beauty of bitcoin is you don't HAVE to trust anyone.

For the first time in history, you can actually be your own bank.

Not your keys, not your coins.

It's not just a meme. It's a warning. And a promise.

The tools exist. The knowledge is free. The choice is yours.

Take the first step today.

⁠Like our CEO says: “Get off zero.”

Buy $100 of real bitcoin. Send it to your own wallet. 

⁠See how easy it is. Feel what true ownership is like.

Because once you experience the power of holding your own keys...

You'll never go back to asking permission.

Start your self-custody journey with Bitcoin Well → 

We make it easy. Take control now.