Renowned investor and “Rich Dad Poor Dad” author Robert Kiyosaki has raised alarm over the reliance on exchange-traded funds (ETFs) for holding Bitcoin and precious metals, warning investors about the risks of paper-based ownership during times of financial distress.
In a statement shared Friday, Kiyosaki likened ETFs to a false sense of security. “An ETF is like having a picture of a gun for personal defense,” he wrote. “Sometimes it’s best to have real gold, silver, Bitcoin, and a gun.” His comments underline the importance of physically holding assets rather than relying on financial instruments that merely represent them.
Kiyosaki has long advocated for ownership of tangible assets as protection against inflation and the weakening U.S. dollar. In May, he urged investors to abandon “fake money” and instead hold bearer assets like BTC, gold, and silver.
His concern stems from a fundamental issue in finance: institutions may issue claims on assets without holding equivalent reserves. In a crisis, this can lead to a bank run—a scenario where panicked investors rush to withdraw funds, triggering liquidity shortfalls and possible collapse.
However, ETF experts counter Kiyosaki’s concerns. Senior Bloomberg ETF analyst Eric Balchunas emphasized that modern ETFs are designed with strict legal protections. “All the shares of the ETF are connected to actual Bitcoin; it’s a one-for-one ratio,” Balchunas told Cointelegraph. “There is no paper.”
Balchunas added that ETFs are among the most tightly regulated financial products, benefiting from clear segregation between the ETF issuer and custodians of the underlying assets. “The ETF industry has a 30-year clean track record,” he noted.
Interestingly, Balchunas also pointed out that ETFs may offer added security for high-net-worth individuals, reducing exposure to physical theft or violent attacks associated with self-custody of crypto assets.
Despite the reassurances, Kiyosaki’s stark warning reignites debate on whether digital or paper claims truly protect wealth in turbulent times.
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