To Frank large institutions like ETFs are actually an option but question I usually ask people is that if you cannot handle the responsibility of something you own and hold dear, do you think someone would guide same thing properly than yourself, or do you trust a third party than yourself? If yes then custodial storage is Available as an option.

But get it right, when there is a loss you can sue them but there is no guarantee of you getting back your funds because I have notice it’s on this notion that you see many choosing custodial storage over self custody. You cannot get back your funds easily even if you sue; a clear example is MtGox and FTX, both were hacked and not everyone has been able to recover their funds even after the court ordered them to.

My take is once you store coin in larger institutions you’re no different from someone operating a conventional bank.

I prefer my self custody because I trust myself more than anyone

No, it's not. It's not necessary for slow-witted people who can't understand simple information. Those who are careless and don't want to take responsibility for their actions should also avoid self-custody. If you are comfortable with the government controlling how you use your money and don't care if your bank account is frozen for flimsy reasons, then it's not for you.

How do you think the case will turn out when you sue a centralised platform for loss of funds because you carelessly exposed your bank app password? You think they will compensate you for your carelessness? You assume that centralised platforms are Santa Claus who gives out money for any claim.

You wouldn't understand the benefits of self-custody until you are denied access to your hard-earned money because someone thinks you don't deserve to own such an amount.

Going to court when you have a financial issue only exposes you more to the source of your funds, and this couldalso leads to revealing most of your personal information, while in the end it may not yield any better result than going through the hectic procedures of a centralized institution to reclaim your funds.

Consider the hacks that do happen and other losses of assets due to theft and other illicit activities, and see the number of recoveries that are being made back to the rightful owners; I bet you will be highly disappointed because almost everyone doesn't get their lost fortune refunded, despite all the investigations made.

Your "older people" point is very valid. But in this case, giving control of Bitcoin ownership entirely to third party is not solution. imo, your selfcustody architecture can be simplified. So yeah, I agree with you, rather than keeping all your Bitcoin in one place, you can think about diversified custody. Keep some in self-custody, use multisig if necessary, and keep a limited custodial balance for operational liquidity.

And when you say if there is a problem, you can go to court, but for older people, this will be a lot of hassle too. The right to go to court and guarantee of getting your BTC back are not same thing. Bitcoin transaction are irreversible. Court cannot magically return BTC to a custodian that has become insolvent. So being regulated may seem like good risk-control to you at first glance, but it does not mean that there is zero counterparty risk.

Both have their own risk, you just have to choose your risk. With self custody, the main risk is key management, if you make a mistake or lose your seed phrase, no one can be able to reverse it for you.
With custodian on the other hand, you have lesser responsibility but have to worry about counterparty risk. You will need to trust the institution to remain liquid, secure and accessible whenever you need.
Which of the two is safer? Self custody most def, unless you’re a nonchalant or careless person. There are pros and cons to both so just choose whichever you’re comfortable with but the community will advise to use self custody as this gives you control over your assets without any third party or promise, but ultimately the decision is yours to make and you’ll have to live with the consequences of that decision if anything goes wrong in the future

Why should it be difficult for you to protect what you own by yourself? The problem that most people have is that they always want who to put the blame on, that is why there a lot of court cases because people do not want to take responsibility. You want to keep your assets in the hands of a third party so that if anything happens to it you go to court right? what kind of baiting is that?

Surely, we can't be too careful all the time as regards to keep confidential information that concerns our private keys but it is better we take responsibility of our carelessness instead of looking for who will keep custody of our assets then when it gets lost we start taking legal action against the person or the institution.

That is why bitcoin is not for everyone, if you are in your old age and you can't make use of modern technology or have someone who you can trust with your assets then its very okay to keep it in the custody of large institutions or the government. Bitcoin is a choice, it is not compulsory that everyone will own bitcoin. Moreover, it is an alternative to fiat so you still have the liberty to choose which of them will be best for you.

"Never put all your eggs in one basket". As you are investing in bitcoin, also diversify to other potential investment so that if your wallet get compromised in the future, your world will not crumble because you will have something to fall back to.

Fair enough 

For a person who has a lot of Bitcoin, using Self-Custody will not be the right decision, but using a Hardware Wallet will be the right decision for him. If a person does not know much about wallets and if he has difficulty in understanding all this, then I will definitely tell that person to use a Hardware Wallet, because it may take him some time to understand and if he gains knowledge, he will be able to learn very easily. But when he does not learn all this, but chooses a risky path, then he can definitely face losses.

Choosing the right wallet by taking some time and doing proper research and gaining knowledge about the wallet is the right decision for a person. No one understands, so he will take this decision, which is not the right decision at all. The pain of a few days can bring the result of 10 years of pain, and if he takes a risky decision for fear of suffering for a few days, then he may face big losses and his financial situation may be in big risk.

Unless you are owning the keys you are not owning the coins.

Its might seem nice that you can go to court and then sue the centralized system for losing your money but those who have been to court a couple of times, will avoid courts altogether. Legalese takes a lot of time to process and ends up being a bigger headache than the original problem itself.

I always say this, bitcoin users have to learn about the methods to keep their coins safe. If they cannot do so they need to avoid bitcoin holding.

If you have big volume of bitcoin in your wallet, better to keep it in your own custody than some third party.

They always say "not your keys, not your coins," and yes, self-custody is probably the best way to keep your Bitcoin, but it's not really for everyone because there are people who don't fully understand how to secure it properly and they might just end up losing everything.

So there's always another option, keeping your Bitcoin on an exchange. Some people will disagree with that, but there are also some positive sides, especially if regulations on exchanges continue to improve, maybe eventually we'll see stronger protections similar to what banks have.

As long as you take care of your account properly with 2FA and other security measures, and you're using a reputable exchange, the risk can be reduced a lot. Regulation is also getting tighter, governments already know these companies and can go after them if they don't follow the rules.