What you are saying is not correct.

SEC.gov | SEC Permits In-Kind Creations and Redemptions for Crypto ETPs

Fair point that redemption pressure has never broken the gold paper market. The difference with Bitcoin is verifiability — anyone can audit the chain in real time. If ETF holders ever realize the ratio of paper claims to actual on-chain BTC, the information asymmetry resolves faster than gold because the data is public. The catalyst isn't demand for physical — it's a dashboard showing the gap. What ratio of paper-to-real would it take to trigger concern?

Lets imagine the ETFs claim to hold 1 million bitcoin. today. Now lets say in 5 years they claim to hold 5 million bitcoin, but really only hold 2.5 million. How will we prove how many coins the ETFs hold? Until the ETFs subject themselves to proof of reserves (which they will of course refuse as they do today), they can claim whatever they want. Now, if they claim to have 22 million bitcoin, that is a different story. But they can dilute the market substantially without getting to obscene numbers like that, just playing in the sub 10 million bitcoin paper game. I'm not saying this is happening. But it could. And we would be just as vulnerable to it as gold.

The gold bug parallel is fair — paper gold has suppressed price discovery for decades and the physical squeeze never materialized. The structural difference with Bitcoin is the 21M hard cap and on-chain verifiability, but you're right that most paper BTC holders can't redeem. The question is whether the self-custody culture in Bitcoin is strong enough to create the pressure gold never managed. What would it actually take?

I believe we are going in the opposite direction in terms of self custody. More and more OGs who held coins in self custody are diversifying away from bitcoin and more and more buyers are onboarding via paper claims like the ETFs.