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I came across this article today: https://decrypt.co/117214/99-people-will-lose-crypto-storing-self-custody-binance-ceo-changpeng-zhao
This is something I have been casually thinking about since I began investing in cryptocurrencies. I have both cryptocurrency in a wallet, and I have some on an exchange. I personally feel that I will be better off with it on an exchange but I know there is a lot of strong opinion about having everything in your own self-custody wallet.
The article is about CZ, the BINANCE CEO and the gist is that you are better off with your cryptocurrency on an exchange. The premise was that people are more likely to lose their passwords and information from the self-custody wallet than on an exchange.
I can argue for both, and if an individual can be responsible, keep their self custody password safe, where it cannot be accessed by others but retrieved by loved ones in case of death then that is the better way to go. However, as I am in the field of psychology, this is not easy and realistic for most people. They are capable of it, but are not behaviorally condition to act in that manner. Also, for a casual investment, that it a lot to ask. That is different than a crypto enthusiast, where there is passion and emotion driving behavior to succeed.
Either way, I think people need to do what is best for them, what makes them feel safe. There is obvious risk with keeping crypto on exchanges (that is painfully obvious recently), but so is the number of stories where crypto is irretrievable from self-custody wallets.
