I don't believe that ETFs are inherently good or bad. They are what they are - a form of semi-insured custodial holding of Bitcoin presented as a tradable security.
Remember, the term "trustless" is often a misnomer (nothing is *completely trustless), and it's just one option on the spectrum of trust. While holding your own keys is always the most ideal approach, there are situations and mechanisms where someone might consider investing in a Bitcoin ETF (Canada, for instance, has had these for years).
In my opinion, the most significant drawback is that it doesn't encourage users to learn or practice self-custody. Newcomers frequently overlook the principle of "Not your keys, not your coins!!!!!" 😮💨
Time and time again, I encounter newbs who store their keys on an exchange, hold an ETF, or adopt even riskier practices, yet proudly claim, "I own Bitcoin" or "I invested in Bitcoin." It's always a challenge to correct this misperception while maintaining their enthusiasm.
Adopting a "buyer beware" mindset isn't the best approach. When people face significant losses, they may become disillusioned with Bitcoin, and this negative experience can ripple through their entire network!
ETFs have their merits and can serve a purpose, but it's our responsibility to educate newcomers about their distinctions and the importance of self-custody.