Sygnum Bank Criticizes Crypto ETFs for Weakening Bitcoin’s Core Benefits

Wall Street’s embrace of crypto exchange-traded funds (ETFs) has funneled billions into Bitcoin and Ethereum, yet Swiss digital asset bank Sygnum argues these products dilute crypto’s core advantages.

Speaking at Consensus Hong Kong, Sygnum’s head of strategic digital asset solutions, Max Stuedlein, emphasized that ETFs impose “regular market hours” and restrict 24/7 accessibility—one of crypto’s key benefits. He pointed out that such funds inherit traditional finance limitations like reduced liquidity and restricted trading windows, undermining the decentralized and open nature of digital assets.

“When you wrap Bitcoin into something traditional like an ETF, you destroy its appeal,” Stuedlein said.

Despite U.S. spot Bitcoin ETFs amassing $110 billion (5.89% of Bitcoin’s market cap) and Ethereum ETFs holding $10.37 billion (3.15% of ETH’s market cap), Sygnum remains skeptical. The bank, which manages over $5 billion in assets, believes the industry should focus on developing blockchain-native solutions instead of forcing crypto into outdated financial models.

Sygnum recently surpassed a $1 billion valuation after raising $58 million in a strategic funding round led by Fulgur Ventures. As a FINMA-regulated institution, it bridges crypto and traditional banking while maintaining a commitment to blockchain’s original vision.

Meanwhile, the U.S. SEC is reviewing ETF proposals beyond Bitcoin and Ethereum, with analysts predicting billions in potential inflows for Solana and XRP ETFs if approved. However, Sygnum asserts that true value lies in building digital asset-native products rather than adapting them to traditional finance.

“Focus on the benefits of digital assets and build services around them,” Stuedlein concluded.