Some crypto exchanges are shutting down, should bitcoin holders be worried?

[Taskford]

If you buy and keep bitcoin on an exchange, you trust them to keep your bitcoin safe and let you withdraw anytime you want to withdraw
But what happens when they shutdown?

I could see that you are not a crypto person, otherwise, you would have known that "Not Your Keys, Not Your Coins." Centralised system is the wrongest place to trust with your money, and it gets worse in crypto environment because they can treat you most unfairly since they can hide under the cover of the internet, as they are weakly regulated. Is that where you want to keep your coins and relax? If at all you want to take that risky step, you should go for the top-rated ones only, but still don't hold big money there.

Everyone who enters this crypto/bitcoin world may still have limited knowledge about it just like all of us on our early days when learning about this thing.
I asked some friends about where they do prefer to store their coins few years back when they were still newbies, most of them answered "exchanges" for various reasons such as:

• 1 place for all which make it simple for them to check/access and they can trade it anytime
• Because of trust, they think that if they store the coins on reputable exchanges, their coins are safe
• Worry of losing private keys if they have to use personal non custodial wallet

• Because of small asset only

I asked them then "how if the exchanges you use shutdown suddenly or get hacked"? Silence for a while (maybe start to think about it).
This is why we need to educate others especially friends/relatives if we think that they are doing something wrong.

This is the problem start because lots of newbies really think that exchange are much convenient to use rather than using non custodial wallets. They are engaging with possible huge risk, since if we look at those past incident and the current one. Those situation indicates that exchange are not really the best platform to use in terms of safe keeping their Bitcoins.

Because they might lost their funds if those platform will suddenly shutdown, get hacked and worst turn scam. So for holding always choose the wallet which they can safe keep their keys. Maybe at start they find it hard and hustle to hide their keys. but later on for sure they would learn lot of things that this is the most efficient way to protect their asset for long time.

[Luzin]

You really don't need to be overly afraid because exchange closures can happen for all sorts of unpredictable reasons. It's not that bad because selection will keep happening—those who can survive and innovate will have more users and trust.  Actually, what people are really worried about in the end is losing their assets. We understand that a few preventive steps can be taken. Don't keep all your assets on an exchange. As long as you control your own private keys, owning Bitcoin doesn't depend on the survival of any one company or exchange.

So the main focus is on assets, where keeping assets on an exchange is prone to loss. So it's better to keep assets in your own hard wallet. Because the password keys on exchanges are not completely secure. We always have to transfer assets from the exchange to a personal wallet to avoid losing them.

[MusaMohamed]

This is the problem start because lots of newbies really think that exchange are much convenient to use rather than using non custodial wallets. They are engaging with possible huge risk, since if we look at those past incident and the current one. Those situation indicates that exchange are not really the best platform to use in terms of safe keeping their Bitcoins.

Each market cycle, each market bull run, there will be many newbies join this market and very first places they start are centralized exchanges. On those platforms, they will have access to only custodial wallets, public address for receiving their deposits or from someone else, but they don't have access to private keys, don't own private keys.

Warnings are abundant, more than enough, for newbies, it's only their responsibility to do enough searching and reading carefully.
Like this warning since FTX and Terra crashes.
Reminder: do not keep your money in online accounts
About four years later, we return to this similar warning after BitMEX and BitMart shutdowns.

[GiftedMAN]

Was there a time that keeping your bitcoin in an exchange have ever been safe ? Some of this exchanges aren’t safe, which is why you should be more cautious where to save your bitcoins, I see exchanges as something that is only meant for traders, and keeping some shitcoins, as an investor who appreciates long term investment you should be more concerned about keeping your bitcoins somewhere that is more safe, where it wouldn’t be possible to loose them through scam or whatever, a non-custodial wallet should be something that you can appreciate to keep your bitcoins investment more secure.

You shouldn't be suprised mate, that account is a newbie account and from his statement i don't think he's well knowledgeable about Bitcoin cause first off he won't be worried about those exchanges shutting down if he's a holder, expect he's trading with any of them. Real investors would never want a third party to have access to their coins and would use wallets that gives them self custody, well from the response he's got i believe he'll learn, i expect him to.

@MainIbem don't be so sure that everyone is knowledgeable about the information that was passed by the newbie some people are still making that mistakes till date though they won't be bold enough to open up since they have been warned about keeping Bitcoin in an exchange so they wouldn't want people to see them as novice. The message is clear people should avoid keeping their funds in an exchange cause not all of them will be good enough to allow you to withdraw your funds if they are shutting down and if there's a little problem linking to where your funds was sent to the exchange they wouldn't be patience enough to investigate they will seize the funds completely.

[Oluwa-btc]

It is the reason why they're called exchanges, they have never been reliable.

The same way bankers do not trust Crypto and new innovations in the financial space is the same way we shouldn't trust exchanges and it also boils down to binance. I don't know why I see too many people flocking binance because of their favorite Cryptobro and influencer CZ. He has been a role model for most of them so they be dick riding about binance forgetting they're still exchanges.

Worry less about it in general. Do the little awareness you can and focus more on being your own bank and taking full responsibility.

[Sally9256]

It is the reason why they're called exchanges, they have never been reliable.

The same way bankers do not trust Crypto and new innovations in the financial space is the same way we shouldn't trust exchanges and it also boils down to binance. I don't know why I see too many people flocking binance because of their favorite Cryptobro and influencer CZ. He has been a role model for most of them so they be dick riding about binance forgetting they're still exchanges.

Worry less about it in general. Do the little awareness you can and focus more on being your own bank and taking full responsibility.

Despite all the past experiences with exchanges people still ignore the risk and store their coins on them, trusting someone else with your coins is risky and it's why centralized exchanges are not to be trusted. People ought to have known that exchanges are not reliable by now.

Exchanges are useful for day to day activities but they can't be trusted fully. No matter how reputable the exchange is we shouldn't trust them to store our coins for the long term, they can only be used to carry out trades and other short term services. Many people see Binance as as an untouchable exchange but it's true an exchange will always be an exchange. It's not difficult to adopt self custody so why risk keeping your coins in the custody of a third party when you can easily avoid unexpected troubles.

[Queentoshi]

This got me thinking about people that keep their bitcoin on exchanges

It is an unacceptable error for an investor in this year to be making with their bitcoin investment, keeping their bitcoins on an exchange even with all the news recently. Any investor still doing that is either just very stubborn and stupid, or the type of investor who is not current with news about bitcoins and their investment because they assume that they are good with just knowing how to buy and sell their bitcoins. There is need to stay on trying to stay current with information and news about your investment even after making your first purchase and a couple of other purchases.

Many people see Binance as as an untouchable

Any exchange, no matter how big can shut down anytime.