Not the full story coinbase also custodies assets on behalf of funds and ETFs where people don't own the keys and have no idea what keys are they just know they own some bitcoin in their portfolio.
Same with people who own ETFs that have a piece of it in bitcoin.
As for bitcoin, yes it has the highest self custody rate compared to everything else, while shitcoins like ETH have low self custody rates due to the fees
Also a lot of people don't have the technical knowledge to do staking so they do it via exchanges like coinbase and binance
There's a lot more exposure to CEX"s and people are going to get Quadriga'd and Gox'd
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Those HNWs and institutions that custody with Coinbase (or Fidelity or whoever) all have the same risk. They are depositors and last-in-line creditors.
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Absolutely I agree, these funds don't know what's they getting into, many of them be left with egg on their faces, I mean it's really only coinbase, fidelity and Gemini doing custody and some are even sharing that between one another in a bit of a circle jerk with multi sig in the case of something lien GBTC
Even saylor doesn't custody his bitcoin! Sure they can have legal claims on that bitcoin but the law and getting back those coins are two different things
I don't know when or how but one if these big custody services are going to fuck up or might even have fucked it but are covering it up
I didn't know Saylor doesn't hold his own coins. That's surprising
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I read a quote that he does custody his btc and refuses to lend it out because the single digit gains aren't worth the complications and risks
I was helping a friend who made an absurd amount of money last year talk to financial advisors about crypto. They all said stuff like "yeah we custody with Fidelity."
I told my friend that defeats the entire point of crypto. Fortunately he's savvy enough to understand the point.
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