What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?
It's never going to get like this in my opinion. Bitcoin/Blockchain is a technology that can always be updated/made better and that's exactly what's going on right now and has been for the last few years. Implementing things like the lightning network and Taproot are examples of what can be done to bitcoin to help with it's transaction time frames as well as costs.