As Bitcoin continues to gain institutional interest and the number of retail investors grows, one question remains at the forefront: How should Bitcoin be securely stored?
In an interview with CCN, Joe Burnett, Director of Market Research at Unchained and newly appointed Director of Bitcoin Strategy at Semler Scientific, explains why custody matters for Bitcoin and how Unchained’s collaborative multi-sig solution works. Burnett talks about institutions and high-net-worth clients increasingly turning to self-sovereign storage.
Burnett outlines the risks associated with centralized custody, highlighting why Bitcoin holders are re-evaluating how and where to store digital assets. The article further unpacks these insights from a technical and industry perspective.
The Growing Concern of Bitcoin Self-Custody in 2025: Risks and Solutions
Bitcoin self-custody has become a concern for Bitcoin investors in 2025. With rising institutional interest and growing awareness of counterparty risk, the question of how and where to securely hold Bitcoin is relevant.
Burnett outlines “when you buy Bitcoin on Coinbase or you buy a Bitcoin ETF, you are taking on counterparty risk. Coinbase holds the private keys so they can theoretically run off with your Bitcoin. They’re a massive honeypot targeted by hackers.”
Unlike traditional finance, where trusted intermediaries manage assets, Bitcoin enables individuals to hold private keys with access to wallets. With those keys, individuals maintain full control over funds without relying on any third party.
Unchained’s Collaborative Multi-Sig
In its collaborative custody vault, Unchained leverages a 2-of-3 multi-signature (“multi-sig”) architecture to distribute risk and eliminate single points of failure. Multi-sig means that multiple cryptographic keys must collaborate to authorize a transaction. Requiring two of three keys ensures both user sovereignty and a failsafe recovery.
Burnett explained how “Unchained core Vault custody product is a two-of-three multi-sig. As a client, you hold two keys. Unchained holds the third key as a backup. If you lose one key, you still recover your Bitcoin.”
This structure balances user privacy with operational security, addressing the dangers inherent in custodial single-signature frameworks where centralized exchanges can become lucrative targets for hacks or rogue insiders.
Why Centralized Custody Models Pose Risks and How Multi-Sig Protects Your Bitcoin?
Burnett explains how “if I have your username and password to Coinbase, I can log in and withdraw your Bitcoin. That’s a single point of failure. With Unchained, the attacker would need your password plus one of your private keys.”
Centralized exchange custodial models, such as Coinbase Custody, retain complete control of users’ private keys in internal cold-storage systems. They rely on layered security but are subject to single points of failure and vulnerable to hacks, insider threats, or regulatory action. In contrast, a 2-of-3 multi-sig vault aims to split control leaving privacy with the clients of Unchained.
Custodial exchanges often use complex, undisclosed hot- and cold-storage mixes. Burnett explained how “Mt. Gox is one of the first major Bitcoin exchanges. It was hacked. A lot of coins were lost. You’ve had companies like BlockFi and Celsius. They’ve lent your Bitcoin to the wrong counterparties, lost your Bitcoin, and you may not have gotten any Bitcoin back.”
While large custodians boast enterprise-grade security, history (Mt. Gox, BlockFi, Celsius) shows that losses from hacks and mismanagement are risks that should be considered.
Rising Demand Across Investor Segments: Who’s Demanding Custody?
Burnett explained that Unchained “serves a variety of clients from high-net-worth individuals, small businesses, public corporations and institutions,” and later added, “Unchained recently surpassed a hundred thousand Bitcoin that we helped secure on our platform. So now that’s over 10 billion U S dollars.”
He also noted that, at present, Unchained’s custody services are available exclusively to U.S. clients, underscoring a deliberate focus on domestic compliance and infrastructure.
Why Self-Custody Still Matters in a Crypto ETF World
Even with easy access via ETFs and centralized exchanges, the ultimate frontier remains direct control of private keys. “You can hold Bitcoin without counterparty risk. That’s exactly what Unchained helps people do. Eliminate single points of failure.”
While ETFs simplify buying, they reintroduce custodian risk, making self-custody indispensable for those who prioritize true asset sovereignty and resilience against hacks or regulatory freezes.
The Future of Custody: More Education, More Sovereignty
Looking ahead, custody providers will deepen educational support and refine collaborative models so clients feel confident managing keys.
Burnett added “I think we’ll see even more collaborative custody and education helping people remain sovereign but less scared to hold their keys.”
As custody solutions become more user-friendly, the balance of sovereignty plus safety net is poised to become the industry benchmark.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Was this Article helpful?
