Why you need to withdraw Bitcoin from exchanges

One of the fundamental reasons why Bitcoin is a revolutionary money standard is because it allows you to be your own bank. However, most Bitcoiners still keep their Bitcoin on exchanges, drawn by the convenience of features like instant trading, earning interest, and borrowing, essentially forfeiting the ownership and missing the main point of why Bitcoin was made. Holding Bitcoin on exchanges comes with major risks, and here's why you should withdraw Bitcoin from the likes of Coinbase, Kraken, Binance and others.

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The risks of keeping Bitcoin on exchanges

When you store Bitcoin on an exchange, you don’t actually control your funds - the exchange does. This creates several vulnerabilities:

1. Hacks and insolvency

History is full of examples like Mt. Gox (2014), QuadrigaCX (2019), and FTX (2022), where users lost billions of Euros worth of crypto when exchanges collapsed or were hacked.

2. Regulatory risks

Governments can force exchanges to freeze your accounts or impose restrictions, leaving you unable to access your Bitcoin.

3. Lack of ownership

Without the private keys, you don’t truly own your Bitcoin. As the saying goes, “Not your keys, not your coins.”

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Why people choose exchanges

Exchanges are popular because they offer convenient features:

• Instant Trading: as long as your funds are deposited on the exchange you buy or sell Bitcoin instantly.
• Earning and Borrowing: Lend Bitcoin to earn yield or borrow funds using Bitcoin as collateral in order to trade on a margin.
• Easy UX/UI: you only need to remember your email & password to access assets. Instead of learning the self-custodial ways, people opt for false sense of security and recoverability in case they forget their credentials.

People are usually reactive, not proactive. Therefore, they can't really evaluate the risks until something bad actually happens, whereas the convenient features are immediately accessible.

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The case for self-custody

Self-custody eliminates the risks of exchanges by putting your Bitcoin entirely under your control:

• Full Ownership: You hold the private keys, so no one else can access or freeze your funds.
• Enhanced Privacy: Self-custody reduces exposure to third-party scrutiny.
• Security Against Failures: Your funds are immune to exchange hacks or insolvency.

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Can self-custody be just as convenient?

While security should always trump as the most important feature for your capital protection regardless of anything else, self-custody can also be just as convenient as holding it on exchanges. That's exactly what we're trying solve for at wave.space:

• Exchange BTC and EUR directly between your own wallet and your bank account
• Transfer EUR instantly & for free using SEPA Instant
• Transfer Bitcoin using on-chain or Lightning (coming soon)

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Take Control of Your Bitcoin

Self-custody is by far the best way to protect your assets. With tools like wavelink, you no longer have to sacrifice convenience for security. Bitcoin gives you the freedom to be your own bank - take that freedom into your hands today.

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