An industry-wide debate over institutional crypto adoption and the risk of centralized custody will spark renewed interest in self-custody, OKX President Hong Fang said in a recent interview with CoinDesk.
While the institutional adoption and growing popularity of crypto ETFs is a net positive for the industry, there could be a shift in industry discourse to caution against custody concentration risk, Fang argued . She predicts that most native crypto users will adopt self-custody this year.
On OKX, the assets held in its self-custodial wallets (nearly $50 billion) exceed the assets of its centralized exchange ($30.8 billion).
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“The tension between adoption and concentration risk will be in the spotlight,” said Fang, who will speak at Consensus Hong Kong in February. “In this context, I expect more campaigns from the industry to explain why self-guard is important and how to use it, as well as more products to make it easier for the masses to use self-guard and mitigate risks accordingly.”
According to Fang, OKX DEX volume has increased 20 times. But she maintains that DEXs and centralized exchanges are complementary.
“The crypto-native audience will want to be able to use CEX for reliability and DEX to detect innovations,” she said. “Such supply-demand dynamics will drive DEX adoption to enable innovation while supporting the gradual maturity of the crypto regulatory framework.”
A Bitcoin strategic reserve?
A national strategic reserve of Bitcoin, a policy touted by the new Trump administration, would serve to centralize the main cryptocurrency. But many cryptocurrencies doubt this will happen, if punters on Polymarket are to be believed (as of January 22, they estimated the chances of Trump creating such a reserve in the first 100 days of his administration at just 30% ).
Fang agrees with this sentiment.
“Personally, I find it hard to believe that large sovereign countries like the United States will officially adopt a Bitcoin strategic reserve at the federal level at this point, but it is very possible that smaller countries or sovereign states will do so” , she said.
But since it’s crypto, anything is possible.
Very unexpected events – like the Trump administration’s lack of follow-through on its crypto promises – could quickly put a brake on the uptrend, she said. But the biggest risk, according to Fang, remains excessive centralization.
For this risk, there is a vaccine: self-care. Which, according to OKX, the market is rapidly adopting.
