Most exchanges offer some sort earnings program these days, so earning interest on your coins might be a good reason to store them on exchange. For example those 0.15% you get for BTC on Kraken are totally worth the risk imho (/s)

Let’s talk about the bright side of holding your Bitcoin on an exchange... Why?

Well, reputable exchanges have top-notch security, meaning your assets are in safe hands. Plus, some exchanges even offer insurance to cover a portion of your funds, which is a solid backup. It makes sense to keep your Bitcoin there because if an exchange is running profitably, they’ll do whatever it takes to maintain a good reputation and win the trust of traders. That means employing a solid internal control system to safeguard your assets, so your funds are well-protected.

Now, what about the downsides of keeping your Bitcoin in a hard wallet? There's the risk of losing the hardware wallet, misplacing the key, or even damage from unexpected events like floods or fires. And let’s not forget, we’ve heard stories about criminals breaking into homes to force someone to send their Bitcoin to a specific address. If your Bitcoin is on an exchange, it's not as easy for them, and the exchange could actually assist in tracing where those coins are headed, thanks to their robust system.

If that’s the rate, it’s really not attractive. The whole point of keeping our Bitcoin on an exchange is if we believe it’s safer than a cold wallet.

It’s not much different from a bank with low interest rates, but the good thing about storing crypto is that it’s protected from inflation. The longer you hold, its value can grow...as long as you truly trust the exchange to keep it secure. Hopefully, you won't experience a "Mt. Gox" situation.

At least if I lose my coins, it was caused by my own stupidity instead of other people stupidity.

It's really possible to control ourselves, we can do anything we want and we know what the consequence for doing that. While we don't even know what other people are doing and on their mind, you have zero influence to control other people.

If the criminals know you own Bitcoin, it means you have a bad privacy concern.

Either your coins in CEX or hardware wallet, it's the same, they will force you to send all of your coins to their non custodial wallet, mix them, and then they can't trace it.

The first thing that comes to mind, ignoring all the negatives, is simplicity for the end user. Exchanges handle the technical aspects of security and often provide a user-friendly interface, making it easier for beginners to create accounts. They typically require only a username and password for access, a familiar procedure for most internet users nowadays. In contrast, self-custody and hardware wallets, while quite straightforward in most cases, still require a bit more technical knowledge to set up. Users generally need to install software, connect their device, generate seed keys, write them down, set a PIN and other security measures, make test transactions to verify the process, etc... I think this can be a significant barrier for beginners who lack technical expertise or are unwilling to invest the time in learning new things.

This is true, especially for investors who aren’t putting in big money—just small amounts consistently. They find it safer to use an exchange since it’s easier to understand, like for older individuals who might be interested in investing in Bitcoin but don’t have the patience to learn the technical aspects of creating and securing a wallet. So, exchanges work best for them.

It's understandable where people’s doubts come from, given the past hacks on exchanges. But as Bitcoin becomes more popular and adoption increases, exchange security is also improving. So, as long as you trust the right exchange, storing your Bitcoin there can be a reasonable option.

I still won't encourage strong Bitcoin on any centralised exchanges but since you ask for it.

There are few benefits of storing Bitcoin on an exchange and the top on my list is staking dividends, I believe that centralised exchanges have the best staking rewards, either for ALTs or stable coins or Bitcoin, I've use Binance for staking in the past and it was smooth as promised.

Another one is taking trading shots, sometimes we can be far away from home and we all know that hardware wallets are more safer in our safes than moving them around, if a trading signal comes right into your home you won't be able to move funds out into your exchange to trade since you aren't with the hardware wallet.

Leaving funds on exchange makes trading snappier, but there is a safer route about this, always leave behind some money on centralized exchange for trading purpose.

Exchangers make trading seamless, no need to transfer between wallets or deal with complicated addresses. Another point is convenience, having your Bitcoin on an exchange means you can quickly react to market movements without the delays of moving funds back and forth. This can be especially advantageous for active traders who want to capitalize on price fluctuations. Lastly, many exchanges offer additional features like staking, lending, or earning interest on your holdings, which can enhance your overall investment strategy. A hardware wallet is great for long-term storage but sometimes having that accessibility and potential for growth on an exchange makes sense!

I don't think it's necessary to pretend on this issues cause I believe everyone knows the advantage of storing ones crypto in a hard wallet and the benefits of doing so cannot be emphasized it's also applicable to sn exchange too because on some occasion people tend to sote BTC in sn exchange why because they feel it's easier to be transferred, but then for me I don't want to be biased in my judgement to say choose this nor that for storing but it depends on one's choice and whatever decisions one take in regards to that shouldn't be a problem whereas everyone have their different perspective on how they think and go about with things.