An industry-wide debate over institutional crypto adoption and centralized custody risk will trigger a surge of interest in self-custody, OKX President Hong Fang said in a recent interview with CoinDesk.
While institutional adoption and the growing popularity of crypto ETFs are a net positive for the industry, there may be a shift in the industry narrative to warn against the risk of custodial concentration, Fang argued. She predicts that the majority of native cryptocurrency users will adopt self-custody this year.
At OKX, the assets held in its self-custody wallets (nearly $50 billion) exceed the assets on its centralized exchange ($30.8 billion).
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“The tension between adoption and concentration risk will be the focus,” said Fang, who will be a speaker at Consensus Hong Kong in February. “In this context, I anticipate more industry campaigns to educate why self-custody is important and how to use it, and more products to make it easier for the masses to use self-custody and alleviate the risks accordingly.”
According to Fang, OKX DEX volume has increased 20-fold. But she maintains that DEXs and centralized exchanges are complementary.
“The crypto-native audience will want to be able to use CEXs for reliability and DEXs to capture innovations,” he said. “This supply and demand dynamic will drive greater DEX adoption to enable innovation while supporting the gradual maturity of the crypto regulatory framework.”
A strategic bitcoin reserve?
A national strategic reserve of bitcoins, a policy promoted by the new Trump administration, would serve to centralize the main cryptocurrency. But many in crypto doubt this will actually happen, if bettors at Polymarket are any guide (as of January 22, they were putting the chances of Trump creating such a reserve in the first 100 days of his administration at just 30 percent ).
Fang agrees with this sentiment.
“Personally, I find it difficult to believe that major sovereign countries like the United States will officially adopt the bitcoin strategic reserve at the federal level at this stage, but it is quite possible that smaller sovereign countries or states could do so,” he said.
But, when it comes to cryptocurrencies, anything is possible.
Very unexpected events, such as the Trump administration’s failure to deliver on its crypto promises, could stop the bull run quickly, he said. But the biggest risk, according to Fang, remains excessive centralization.
There is a vaccine for this risk: self-custody. Something that, according to OKX, the market is quickly adopting.
