Why are investors more likely to hold Bitcoin in exchange wallets?

[Juicyhome]

I think we should be extremely careful from now on, because with the amount of money the world's best exchange like Binance lost in a short-term attack, there is no guarantee that our hard-earned Bitcoins will not end up in the hands of hackers in an instant. Even though exchange wallets have some advantages, I think we should think long-term and prioritize the security of our investments.

It's crazy no wallet is safe from hackers,  the binance hacking  is a lesson for us to learn from it and stop hold our bitcoin in exchange wallet, it's better to store in in a drive and keep it a a secure place or else it's still risky any one that touches it will steal your bitcoin.  This is the second times binance is experiencing hacking,  is that no site is safe from hackers? Inspite of the millions spend on security features of the site hackers still find a way to access the site.

Have pull all my coins in bybit to my drive I don't want story that touches,  hackers are the most dangerous people on earth,  they can ruin your life within a second once they get access to your site and they can't be trace, crypto transaction is hard to trace the individual involved.  We have to act smart because hackers are not sleeping. Don't hold your bitcoin in an exchange.

[TheButterZone]

So when the exchanges are inevitably hacked or exit-scammed, they can deduct the massive loss on their taxes? 

[Youngrebel]

It's crazy no wallet is safe from hackers,  the binance hacking  is a lesson for us to learn from it and stop hold our bitcoin in exchange wallet, it's better to store in in a drive and keep it a a secure place or else it's still risky any one that touches it will steal your bitcoin.  This is the second times binance is experiencing hacking,  is that no site is safe from hackers? Inspite of the millions spend on security features of the site hackers still find a way to access the site.

Have pull all my coins in bybit to my drive I don't want story that touches,  hackers are the most dangerous people on earth,  they can ruin your life within a second once they get access to your site and they can't be trace, crypto transaction is hard to trace the individual involved.  We have to act smart because hackers are not sleeping. Don't hold your bitcoin in an exchange.

To be honest ehh keeping large amounts of Bitcoin on exchanges is a very very big risk most especially when incidents like this happen, but then i wouldn’t say that no wallet is safe or they is any wallet that is safe but the important thing here is knowing the difference between exchange wallet and personal wallet, this is very very important like me if I move my coins to my personal wallet automatically I have control over my private keys, but am also responsible for protecting them and I treat they with excess care because even a personal wallet can be compromised if someone gets access to your seed phrase or device and am even tired of binance because this is not the first time it has been hacked right from march 2018 till now what’s happening exactly.

[Nothingtodo]

Different central exchanges have been hacked at different times and we have become aware of the evolution of time and also forgotten the memories of the past in the evolution of time. It is said that quite a while ago, Bybit and Bitget exchanges were hacked, then we were aware for a while and then forgot again and we forgot and started keeping our Bitcoin in the exchange wallet again. Binance was hacked a few days ago and we are very aware at the moment but we will not remember this for long, rather we will forget the incident of this hack and start keeping our crypto currency in the exchange again. There will be another major hacking and we will be affected again and forget the memories of the past and start keeping it again and this will continue for ages.

[ZeroVinsonN]

A big reason here may be that investors worry that if they lose their Seed Phrase for some reason, they will never be able to access their Bitcoins again. But on a centralized platform, if they forget their password, they can reset it via email. If they lose 2FA, they can recover it again with the KYC document. Perhaps they take risks thinking about these things. And if the amount is small, they don't worry too much about it. But those who invest in large amounts do not put their funds at risk by using centralized exchanges.

Chances are that most of the BTC in exchanges aren't there because people are holding there but because those people want to trade with it so they hold in an exchange but it's usually short term so they feel the risks are minimal enough to take.
Also exchanges work somehow like conventional banks and people are already used to that so it's easier for them to use (somewhat). We should also keep in mind that no matter how much we say self custody is better there will always be people who don't trust themselves enough to hold their own coin so once a trusted third party offers to hold it for them they simply jump at the opportunity, I say trusted because they are legal.