Using traditional financial instruments to solve crypto user experience issues contradicts the industry's original goals. The data is clear: spot Bitcoin exchange-traded funds (ETFs) have greatly benefited the market. On their first trading day in the US, they saw over $4.6 billion in volume. Within a month, Bitcoin exceeded $50,000 for the first time since the bear market and reached $70,000 in March for the first time ever.

However, this liquidity boost from Bitcoin ETFs doesn't address the core issues in today's crypto user experience or promote investor empowerment through self-custody.

Ethereum ETFs are likely to have a similar outcome. Instead of relying on regulatory approval of these financial products to attract traditional investors, our industry needs to rethink digital asset management to ensure users don't have to choose between convenience and financial freedom.

The interest in ETFs reveals that investors want exposure to the crypto market without the hassle of digital asset custody. With over 900,000 ETH permanently lost due to user error, it's understandable that investors seek simpler ways to access the value created in this space.

But addressing crypto's user experience challenges with traditional financial instruments goes against the industry's mission to transform existing financial infrastructure and empower individuals.

After years of skepticism from Wall Street, ETFs are a tacit acknowledgment by traditional investors of the crypto sector's potential to attract retail and non-crypto money. If Ethereum ETF approval increases interest in crypto — whether it's bullish interest from BlackRock's Larry Fink, opposition from ECB director generals, or curiosity from my local gym trainer — the opportunity lies in guiding these new investors towards full ownership of their assets.

The ETF wrapper is just an entry point to crypto as an asset; true ownership lies in self-custody.

The newfound industry attention underscores the need to trust ourselves. While the importance of self-custody and financial freedom may be obvious to those in the crypto community, trusting traditional banks is the norm for many, and their convenience often outweighs the perceived risks of crypto.

When the Bitcoin white paper was published 15 years ago, it envisioned a peer-to-peer network without financial intermediaries. Ethereum expanded digital asset functionality and laid the groundwork for DeFi innovation, allowing individuals to harness digital ownership and exchange assets globally while maintaining privacy and autonomy.

The challenge now is to involve people of all investment experience levels directly through self-custody. Products like ETFs, which mimic traditional finance instruments, may positively impact the market but do not encourage individuals to rethink traditional financial hierarchies and take ownership of their assets. Only through direct engagement with self-custody platforms will crypto values influence mainstream audiences.

Improving our infrastructure is crucial. How can we convince the next billion users to value freedom over convenience? Seed phrases and hardware wallets won't make digital ownership accessible to mainstream users. In an era where payments can be made with a tap of a phone or watch, the crypto industry needs user-friendly features to appeal to traditional investors and everyday users.

This is why leaders like Vitalik Buterin in the Ethereum space advocate for transitioning to smart accounts. By simplifying digital asset management, smart accounts enable features like crypto recovery, self-custodial debit cards, and email login. Alongside smart accounts, advancements in scaling tools like zero-knowledge (zk) rollups have increased the capacity and throughput of DeFi applications, overcoming bottlenecks and preparing the industry for mainstream adoption.

Enhanced features and scalability have paved the way for new crypto use cases. Self-custody is no longer limited to individual asset management. With multi-signature accounts, organizations and businesses can co-manage assets easily. Additionally, developments in zk have reduced transaction fees, making it feasible for projects to process large batches of transactions cost-effectively.

The crypto industry needs to maintain momentum. Bitcoin and Ethereum ETFs have captured public interest, and the industry must leverage this attention to promote self-custody and highlight the benefits of digital ownership.

ETFs drive adoption, but true crypto ownership fosters autonomy. Simplifying the crypto user experience should be prioritized over simple ETF wrappers and commodity baskets. With new liquidity, the industry should use this pivotal moment to revamp the user experience across the board. Enhancing crypto-native platforms will advance the movement for digital ownership, which will outlast any market trends in the coming years.

Julian Grigo is the Head of Institutions at Safe. Before joining Safe, Julian led the Digital Assets Business Unit at Solaris. As Head of Digital Banking at Bitkom, Julian contributed to a whitepaper on Decentralized Finance and provided industry insight on crypto regulation to the German Parliament.