Yet, we are still seeing billions of dollars deposited into exchanges, what happens if those exchanges started to use your money to do something with it? What if there are 2 billion dollars deposited but 1.5 billion dollars left because exchange lost half a million dollars trying to do something? As long as people do not withdraw all together, they will slowly make that back as profit and will eventually equal the deposited number again.
Yes, that's exactly my point(s). As I pointed out my first reply in this thread here (
https://bitcointalk.org/index.php?topic=5372469.msg58496931#msg58496931), two major exchanges have already been caught red handed doing exactly this, and using customers' deposits without their knowledge or consent to invest and try to make themselves more profit. I would wager that many other big exchanges also do similar things, using their large bitcoin holdings to fund loans, investments, expansions, etc., and therefore leaving them not holding 100% of their customers' deposits. Since the only time everyone tries to withdraw their coins from an exchange en masse is when they already know that exchange is having major liquidity problems, by which time it is already too late for the users in question, then most exchanges doing this will get away with doing this just fine right up to that moment it becomes too late.
There really is no reason to leave you coins long term on an exchange or other centralized service, and you very well might find your coins aren't really there when you come to withdraw them.