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?
I don't think we will have a situation when Bitcoin transaction fees will only be affordable for large institutions and not for individuals. If that becomes the case, then we might demand for fork to increase the block size.
Network is centralized at some point because centralized exchanges hold the most reserves and have the highest trading volume and secondly, China and the USA own the most mining hash rate. So, bitcoin is centralized at some point.