That also applies to most large investment banks and Financial services companies that hold funds for large investors... FDIC only insures individual accounts up to $250k. Consumer-oriented banks and Credit Unions are *not* required to be insured -- but of course for obvious reasons most do sign on to FDIC insurance. Even at current BTC value in USD it's not that hard to be HODLing coin worth more than that.

That said of course the Best Practice is to keep the majority of ones coins in a safe custodial cold wallet and only have 'playin' around money' on an non-custodial exchange.

Electrum Coldstorage would be the best option or any offline wallet that supports seed/private keys generation. Without these backups, you no longer own your Coins.  

Bitcoin non-custodial exchange is not widely used or does it seem they stop developing BTC DEX exchange?
I mostly see DEX exchanges in ERC20 and BSC networks but no one has yet developed an exchange where you can import a private key and start to exchange. There is Dex Binance before but it seems it's gone.



They do also afraid of a price drop which is why they want to stay holding coins in exchanges to make sure they won't lose so much if the price is dropping constantly.

Before holding your funds in unknown exchange,it’s better to deep verification for the same.Because now huge scam and hacking on exchange was happened.So it’s nothing wrong to be aware before the loss take place.Once the loss take place by hacking,you may forced to loss the hard earned money.Money is not easy to earn and the investors should careful on the investing exchanges.

No matter how reputable and well-known an exchange is doesn't make it hack-proof. Even an exchange as big as Bitfinex has been hacked in the past. It's just up to you if you want to risk it, and potentially be a victim in the future.

https://cryptosec.info/exchange-hacks

If you don't have control over your keys and it has exchange features then it won't be a wallet anymore. A wallet is a software that creates and manages your keys, that's all. If you want to have the ability to exchange bitcoin to something else you have to use an exchange, it  could be CEX or DEX. Some DEX like Bisq also give you the ability to manage your keys in the same software.

Even if the cryptocurrencies are covered by the insurance companies in the future it simply eliminate the actual creation of p2p and decentralization so use exchanges for trading not for storing. Most of the exchanges even the reputed ones like Binance got hacked so st anytime anything can happen so be cautious and keep your assets on your control that means store them in non custodial wallet and it should be open sourced but don't forget to keep the private keys safely.

The matter should be quite simple if the user of a centralized crypto exchange buys Bitcoin for fiat, and then sends it to his non-custodial crypto wallet, often paying a very expensive service fee. But people who trade on a daily basis cannot afford to withdraw every day precisely because of the service fee that demotivates them, so they have to live with the risk.

Some will say that CEX should start using LN, others that they should use alternative cryptocurrencies and tokens, but the average user is, after all, just a trader who believes that nothing bad will happen to him and, to be honest, does not want to take responsibility for be your own bank. If we look at history and the case of Mt.Gox and Bitfinex, and then later QuadrigaCX and many other smaller incidents, you would think that this would affect the general perception of every investor, but people have obviously brought short-term memory to perfection.

Those who do not learn from history risk having the same things happen to them, but this is obviously a risk they are willing to accept.

Saying not your keys, not your coins is someone everyone knows about it but due to many reasons people will finally keep their coins in exchanges even for a long time, some exchanges will offer loans by investing the coins and some others will offer some amount of interest over the money people invest on the exchanges, while even if we consider the exchange is well-known and they would not run away with our money there is still a possibility to lose the coins after hacking the exchanges and as the op mentioned this happened many times to many exchanges.

Exchange platforms do really make out those kind of things just to make people to be shackled? We can say that but we cant make out conclusions that they are doing it on purpose.
Even some people do hate up centralization but we cant really that able to avoid some services which would really be ending up for us to make use of it.When we do talk about
risk then we do know that not your keys then it wont be your assets but since we do need some conversion or simply buy and sell then we wont really be having
any choice but to deal with it.

I have several bitcoins I got from helping an early adopter friend of mine, can any one tell me how I can get them on to an exchange to sell?  Any exchange. All the exchanges that I have contacted and opened accounts, finally after opening the accounts, they only want to sell me their own coins.