Bitcoin Self-Custody Rates Plummet Amid Growing Demand for Custodial Solutions

The rate of self-custody for Bitcoin has dropped to approximately 49% from around 78% in late 2022, according to Glassnode data cited by Bitcoin Magazine. This marks a historic first in the cryptocurrency's history.

The decline is attributed to an increase in demand for custodial solutions such as spot Bitcoin ETPs and ETFs. These instruments now collectively hold approximately 1.3 million BTC, representing about 6.4% of the total circulating supply.

Public corporations have also joined the trend, with companies holding more than 1 million BTC across various entities, each with holdings of at least 1,000 BTC.

The shift away from self-custody practices comes despite the lessons learned from FTX's spectacular collapse in November 2022. At the time, the crypto world collectively agreed that trusting third parties with one's coins was a terrible idea, with the slogan 'Not your keys, not your coins' becoming a battle cry.