Yes, it's very much like cash. You could keep cash under the bed, house goes on fire - no more cash. Someone breaks into the house and steals cash. Flipping to digital asset self custody, if you either lose your private key or its compromised by someone - that's it - your funds are gone.
Hmm, yes & no. It is like cash but not precisely so. Before I explain why I acknowledge your reference to the Multi sig centralised model & their ability to trot off into the sun set.
With self custody there is another line of defence against loss that has not been mentioned yet at least I didn't see it mentioned.
- You could keep crypto keys under the bed, house goes on fire - no more crypto keys = no more crypto. Not exactly; when you self custody on a hardware wallet you must set up & record a recovery set of words. In the event that your keys are lost or stolen or your hardware wallet is stolen you can buy a new hardware wallet & restore all your assets onto the new hardware wallet using the recovery set of words. Of course you must manage the record of the recovery words intelligently just like you would a password. Perhaps half the words with a family member & half the words in a safe place.
- Someone breaks into the house and steals crypto keys - You're in trouble here, assuming they know what they've got their hands on & know how to extract it.
- If you die & have not made arrangements / shared details then that is also a real risk of complete loss.