A Defense of Financial Freedom and Privacy

Hester Peirce, a commissioner at the U.S. Securities and Exchange Commission (SEC), has affirmed that the self-custody of digital assets and financial privacy are fundamental rights that align with America’s founding principles of freedom. Peirce questioned why anyone should be forced to use an intermediary to hold their own assets, stating it “baffles me that in this country, which is so premised on freedom, that would even be an issue.”

She also argued that online financial privacy should be the default standard, not the exception. Peirce criticized the prevailing attitude that presumes wrongdoing from those who wish to keep their transactions private, suggesting the opposite should be true. These comments come as the Digital Asset Market Structure Clarity Act, a bill addressing self-custody, Anti-Money Laundering (AML) regulations, and asset classification, has reportedly been delayed until 2026.

Bitcoin’s Ethos Challenged by ETFs

Despite strong ideological support for self-custody, a practical shift is underway in the market. A growing number of large-scale investors and long-term Bitcoin holders are moving away from personal wallets and toward Exchange-Traded Funds (ETFs). This trend is driven by the tax advantages and simplified management offered by these regulated investment vehicles.

Dr. Martin Hiesboeck, head of research at crypto exchange Uphold, noted that this marks “the first decline in self-custodied Bitcoin in 15 years.” He attributed the change to the SEC’s approval of in-kind creations and redemptions for crypto ETFs, which allows for the tax-efficient exchange of crypto for ETF shares. Hiesboeck described this move away from the “not your keys, not your coins” mantra as “another nail in the coffin of the original crypto spirit.”

The tension was highlighted when prominent analyst PlanB, creator of the stock-to-flow model, announced he had moved his Bitcoin into ETFs to avoid the “hassle” of managing private keys. The decision sparked an outcry from many in the Bitcoin community, who argued that entrusting assets to a third party directly contradicts the core principles of decentralization and personal sovereignty that Bitcoin was built on.