Keeping Bitcoin in Wallet or Exchange ?

[Yugocean]

One of the causes for the drop in the value of Bitcoin on the crypto market is the abundance of bitcoins available on exchange platforms.

As a result, HODLers are being advised to store their bitcoin in their wallets rather than on the trading site.

Crypto investors believe that if exchange platforms do not receive enough bitcoin investment, the absence of BTC liquidity will boost Bitcoin's market value.

At the present, no one has provided an answer to the query coming up in the assertion, the prime issue is, the value of bitcoin would only increase relative to other cryptocurrencies owing to a lack of liquidity; therefore, what will be the effect if bitcoin liquidity suddenly increases?

More recently, a bitcoin whale sold 1000 BTC that had been idle since 2013, resulting in an increase in bitcoin market liquidity. (Read Here)
If a whale can land bitcoin in a collapsing market, it's not impossible that similar activities can occur during an increase.​

 

[Mika]

At the moment, I do not have any Bitcoin. I have altcoins and I have my assets spread over different exchanges and wallets. I started with Coinbase. Coinbase started with being a bitcoin wallet and later became a multi-currency wallet and an exchange platform. Later I started using Binance. More than 90 percent of my assets are on the Binance exchange. I know there is a risk of using an exchange, especially a centralized exchange like Binance, But whether you realize it or not exchanges like Binance also provide a lot of income opportunities if you store your assets. I have some AXS tokens on Binance, I earn 120 percent APY by staking my AXS tokens. I have also staked Shib tokens, ADA, Matic, etc. on Binance, I get 10-21 percent APY on these tokens. Can you get this kind of passive reward on your wallet? I get 12 percent APY by staking ADA on Binance. Exodus is a multi-currency crypto wallet that also offers staking rewards. They give you 3.5 percent APY. Now compare this with Binance staking reward. There are a lot of benefits of using exchange instead of wallets. When you store on exchanges, the exchanges will of course benefit but you can take the share of the benefit.

 

[Yugocean]

Exchanges will pay reward for bringing liquidity to them, yet they have their rules, you also have to keep some of your cryptos into your wallet instead of exchange. Except for POS, no coin or token is worth for wallet, because only POS have staking options.

Exchange liquidity will still decrease on whatever you have in wallet, and not in the trading market (exchange platforms).

Even coin bade have a wallet, and Armstrong even has argued people to join the wallet and leave exchange, there might be more than one reasons for anything. I will convert my cryptos to POS if I have to keep them in wallet.