The more likely scenario is manipulation by banks and wall street in order to try and accumulate more coins for cheap. Depending how desperate they get, determines how desperate their measures go both within the Bitcoin market and outside of it. This is nothing new, during earlier times where people and entities competed/fought for rule over assets and commodities, banks and wall street were known to play dirty. No different this time.
Centralization through ownership of supply (which would effect the market, not network) is a possibility if people sell to them. Centralization of the network is a much larger and more complicated task, requiring control over territory and influencing/controlling both local and international mining operations.
I know that concentrating the supply in the hands of a few affects the market. But if big players hold all of the cards, it would be almost impossible to get access to crypto. I mean, big institutional investment firms and governments holding all of the coins where it's only possible to buy/sell through them. Most people nowadays leave their coins in exchanges instead of their own self-custody wallet, so expect things to get worse in the long run.
The only coins governments and institutional firms are buying are BTC and ETH. So the rest are safe from harm's way. At least, for now. Who knows what will happen in the future?
I suppose that may have been in mind when creating 8 decimals. Even if banks want to hoard and control majority of the supply, people will still be able to barter and exchange with satoshis. It would be technically impossible for them to control
all of the supply. Even now, large firms and funds still control less than 15% of the supply (at least according to what is tracked and recorded).
It's not good to leave funds in an exchange though yes I know people do it. Hopefully, they will change that attitude.
The only coins governments and institutional firms are buying are BTC and ETH. So the rest are safe from harm's way. At least, for now. Who knows what will happen in the future?
Only time will tell!