“Kind of like your savings account belonging to the bank?”
that’s actually correct, but the difference between banks and crypto exchanges is that if an FDIC insured bank goes broke and/or steals your money, you’ll get it back anyway (up to the FDIC max) because it’s insured by FDIC ... PLUS, FDIC banks operate under stringent Federal regulation and are regularly audited by the Feds, so the chances of theft and/or failure are very small to start with ...
also, FDIC banks segregate customer deposits into separate accounts, whereas crypto exchanges co-mingle ALL of their “deposits” into one or two gigantic “wallets”t that THEY own ...
Your post is mostly correct—and I agree that crypto is a great way to separate fools from their money.
That said, it has been a major effort to keep banks from gambling in the modern era—they use their lobbyists to try to find ways so they win and .gov bails them out if they lose—and the FDIC is vastly under-funded and could not handle a major financial meltdown.
In addition in the event of a bank failure it could take several months before insured deposits would be reimbursed by FDIC.
The main reason I still keep funds in banks is my view that if the financial system collapses it won’t matter anyway—the dollar and the modern world economy will fall with it.
Crypto, on the other hand, is wild gambling with the house holding all the cards—I would prefer to do that at a casino.
Thanks,
Another reason not to invest in crypto!