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While the community celebrates the approval of spot Ether exchange-traded funds (ETFs) in the United States, one industry executive has criticized the centralized nature of these products.

The emergence of cryptocurrencies like Bitcoin (BTC) and Ether (ETH) has revolutionized finance and removed the need for intermediaries, allowing the transfer of funds without relying on a central authority.

On the other hand, with the introduction of ETFs, cryptocurrencies are at risk of becoming less centralized, according to Avantgarde Finance founder Mona El Isa.

ETF issuers are placing outdated technology back into crypto products and undermining its purpose, just to stay relevant, El Isa told Cointelegraph.

She noted that the Ether ETF sparks interest from traditional finance (TradFi) because the ETF structure and regulations are familiar territory, and it speaks the language of conventional finance.

However, accessing Ethereum through an ETF misses the core benefits of Ethereums decentralized and disintermediated design, El Isa stated.

According to the executive, the newly approved product will see some adoption, but investors are likely to eventually prefer self-custody over holding ETFs as it offers more benefits. She said:

Noncustodial or self-custodial crypto wallets allow users to own Bitcoin by taking full responsibility for holding the private key or the actual assets. Unlike self-custodial solutions, spot crypto ETFs do not allow investors to hold the cryptocurrency as they rely on third-party custodians like Coinbase.

Some industry execs agreed that the Ether ETF approval sparked both investor excitement and decentralization debate.

As Buterin himself addresses the issues faced by Ethereum though, such as MEV and liquid staking, there is no doubt that a long-lasting battle lies ahead to maintain the balance and ensure Ethereum remains as decentralized and democratic as possible, Bybits head of financial products Hao Yang told Cointelegraph.

Related: Ethereum ETF approvals becoming giant political issue Joseph Lubin

He also expressed optimism over the future of the crypto industry in the context of the latest approvals, saying:

El Isa isnt the only one skeptical of crypto ETFs due to concerns about centralization.

Josef Ttek, a Bitcoin analyst at the hardware crypto wallet firm Trezor, previously argued that spot Bitcoin ETFs may take investors further away from self-custody or even create millions of unbacked Bitcoin.

Trezor CEO Matej Zak also argued that storing an ETFs underlying cryptocurrency on platforms like Coinbase makes spot crypto ETFs vulnerable to hacks.

At the same time, issuers believe there is no direct conflict between self-custody and spot crypto ETFs.

Magazine: Bybits Notcoin listing debacle, China firms profits up 12-fold after crypto buy: Asia Express

Originally posted here:

Ether ETFs will 'destroy ethos of crypto,' says DeFi exec - Cointelegraph