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.

[Ab de villiers]

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.

These hacks and scams are  increasing awareness about holding things on exchanges because mostly people feel it's not enough hassle to hold things on exchanges instead of having them in their own custody, where they need to do many things for security and control of their funds. Crypto has enough potential to do as an investor or holder needs to protect its funds, but mostly people do not have enough knowledge about exchanges where things have never worked, as they can do for their own funds. Self custody has also never been easy, but still it gives enough boost to anyone's investment and understanding of risk management, and doing things for safety is always important, never try to compromise with things like these.

[Byebyebtc]

Lazy generation chooses convince over security.

Trusting all your funds and asset with a 3rd party is generally not safe, but individuals seem to ignore that fact, and that shows some levels of carelessness to me. Yes it could be used for trading but when it comes to savings money or long term investment it's not the best choice.

[Wiwo]

Lazy generation chooses convenience over security.

Trusting all your funds and assets with a 3rd party is generally not safe, but individuals seem to ignore that fact, and that shows some levels of carelessness to me. Yes it could be used for trading but when it comes to savings money or long term investment it's not the best choice.

Don't get things twisted, exchange are good custodian of fund's, most especially those that are meant for money activities and movement, so even security wise exchange are secured and could be trusted at least the big exchange.

Most investors have confidence in exchange like Binance and their safu fund's which serve as replacement incase of any hack or other incidents that involved them directly.

Convenience is there but the truth is that exchange user's are not just goinzfor convenience their definitely have other motives behind such a choice.

[abel1337]

It's hard to deny that even with the rampant hacking incidents in these past few years, there are still people who holds their asset on a centralized exchange. There are many reasons for this but I think it is the convinience that matters to them. I myself have some small amounts of bitcoin and stable coin to an exchange since I need to transfer some bitcoin/crypto with ease, since there are times that I want to do a transfer but I only have my phone with me. I only have a relatively small amount of crypto on my exchange account, but to be honest it is really helpful. Especially if I want to do a quick stable coin transfer, I can choose whatever chains are available on the exchange.

We all know that binance got hacked recently and if ever binance commits on their word and not affects their users, there's a high chance that their customer confidence on storing their bitcoin and crypto on binance will increase since they have an assurance from Binance.

But going back, as for me, it's for the convenience though I can only trust a small amount of funds to them. I definitely won't store majority of my bitcoin to binance, like never 

[Rgram]

We have seen this before that some popular exchanges have been hacked, but we have not stopped using exchange wallets for long-term holding from that place. Maybe there are some things that investors always ignore the various risks.

This is just a wide assumption which isn’t all that accurate. It is true that there are those that tends to hold a most of their Bitcoin on exchanges which accounts for some of the high numbers we see in the event of a hack but, it’s very unlikely that informed investors would prefer using exchanges as wallets.
In most cases, it is those that actively trade cryptos on exchanges that prefer to leave some amount of their Bitcoin and other crypto assets on exchanges to avoid having to fund and withdraw before and after every trading session.

Some of the coins that get stolen in these hacks are largely exchange coins as well. Most users on this forum know better than to use exchanges as wallets.

[lombok]

Don't get things twisted, exchange are good custodian of fund's, most especially those that are meant for money activities and movement, so even security wise exchange are secured and could be trusted at least the big exchange.

Most investors have confidence in exchange like Binance and their safu fund's which serve as replacement incase of any hack or other incidents that involved them directly.

Convenience is there but the truth is that exchange user's are not just goinzfor convenience their definitely have other motives behind such a choice.

The selection of large digital asset exchange service is typically made after analyzing protection requirements and financial resources management. The high level of trust in the service provider is ensured by the presence of the emergency reimbursement system which can cope with any technical problems or hacks of the network. Putting funds into centralized systems is obviously not only about the convenience of making operations at any time. There are some particular reasons for doing this, like getting the liquidity of the market, fast execution of orders, and advanced investment opportunities. The management of a cryptocurrency portfolio using this environment demands some additional attention to make sure that all the financial operations yield steady results without risks and not put all the money in one wallet of the third party service provider.

[Primark]

We all know that binance got hacked recently and if ever binance commits on their word and not affects their users, there's a high chance that their customer confidence on storing their bitcoin and crypto on binance will increase since they have an assurance from Binance.

Binance has already compensated most of their customers' assets, which is certainly a positive for them. Even compensating users will increase people's trust in the Binance institution, which I agree with. However, keep in mind that increasing trust does not make it safer to keep Bitcoin on the exchange in the long term. Binance may have been in a financial position to compensate at the moment, which is why they dared to do so. But there is no guarantee that their situation will remain the same if another disaster or, let's say, a similar event occurs in the future. Even when assets are stored on the exchange, the institution usually has final control over the transfer of Bitcoin. Therefore, even if they are willing to return the assets, you may still have to wait if the withdrawal is blocked for some reason.

[snowpega]

Don't get things twisted, exchange are good custodian of fund's, most especially those that are meant for money activities and movement, so even security wise exchange are secured and could be trusted at least the big exchange.

Most investors have confidence in exchange like Binance and their safu fund's which serve as replacement incase of any hack or other incidents that involved them directly.

Convenience is there but the truth is that exchange user's are not just goinzfor convenience their definitely have other motives behind such a choice.

Not all, but only some. If you are the one who really cares about your money, you are not going to rely on centralized exchanges too much. Now, this also varies from condition to condition, like if you are using centralized exchanges just for trading purposes or P2P purposes, then I can say that this is fine. But long-term holding on any centralized exchange is not safe now, even if it is the world's biggest exchange.

For the best of your own security, we need to understand the nuance of this matter: holding long-term funds on centralized exchanges is never a good idea at all, in my point of view. Blindly trusting something can also become a nightmare. So, in such matters, we need to make sure that security comes before anything else in the crypto space for the best survival. What do you think? CMIIW!