While I am sure they go to great lengths to secure this money (!), we'd have to concede there is a non-zero chance they could lose some or all of this Bitcoin to theft or simply losing it.
And then what?
You don't need to wait for what before you take action; all that's needed is safety. Never hold your coins on a centralised exchange or a custodial storage. Be your own security boss, and that will save you from the stress of thinking about what might happen later.
Just as Coinbase advised their users to use whatever security means necessary to protect their credentials from being accessed by thiefs since they won't be held responsible for any loss incurred by such action customers, as you need to be responsible for your own security; in other words, they should not hold anyone responsible other than themselves.
Coinbase offers this vague promise on their website that they are
"partially insured", but does anybody know what that actually means? If they are hacked and the addresses get destroyed or stolen (we'd never know which), then... where would that leave Coinbase depositors?
The quote from their policy's below should be able to explain that better. It means even with that large amount that they hold, there is a level of damage that the exchange will incur that every customer will have to suffer for the loss as no one will be refunded, so it's high risk to even trust a third party to hold your fund for you. They even made it clear that crypto currency is not a legal tender, which means your deposit is not protected by FDIC like they do for banks, which protects customers deposits.
In conclusion, it always goes back to the regular preaching in forums. Not your key, not your coin.
In case of a covered security event, we will endeavor to make you whole. However, total losses may exceed insurance recoveries so your funds may still be lost.