The Best Way to Store Cryptocurrencies

If you're thinking about investing in cryptocurrency, you might wonder: Where will I store my funds?

Understanding how to save your assets is crucial to avoiding early failures in your journey. For example, in 2021, crypto owner Stephan Thomas lost about 7.000 Bitcoins due to a forgotten password in his wallet. A relatively conservative estimate puts the total amount of Bitcoins banned globally due to key losses at about $140 billion.

In this article, we'll break down all the available options and discuss the pros and cons of each method. Stay tuned until the end to find out the best way!

How To Store Cryptocurrencies?

To begin with, note that you can’t hold your virtual savings in a bank account like fiat money. For this, you need a crypto wallet. It may be an internet platform, an app, a hardware device, or even a piece of paper.

A cryptocurrency wallet is a program or device that stores private and public keys together with transaction data and your cryptocurrency funds. There are several classifications, and one of the main differences with the storage approach is whether it is hot (online) or cold (offline).

In addition, Cryptomus also has a digital wallet where you may hold cryptocurrency. You’ll learn more about this service, how to use it, and its benefits from the article that follows.

How To Store Crypto Online?

A hot wallet is always connected to the net and has access to the blockchain. In other words, it holds crypto assets online. Most commonly, they occur in the form of mobile and desktop programs; there are also web versions. Sending and receiving money can be done quickly if there is continuous internet availability.

A detailed guide on how to create your own online wallet can be found at the link.

Custodial Hot Wallets

Another classification of hot wallets is divided by the method of keeping private keys: custodial and non-custodial. They are cryptographic codes that provide you with access to digital savings.

Well, we'll talk about the custodial type of wallet. This type has a strong Internet connection and is linked to an intermediary provider. For example, Cryptomus provides this kind of crypto wallet. The Cryptomus wallet is one of the most common instruments for saving cryptocurrency due to its user-friendly interface and reliable security measures. Gaining back access to the personal account is simple and quick, as the intermediary service knows your identity and protects your personal data.

Pros and Cons

Investors favor custodial wallets because this type has its own advantages:

• You hold cryptocurrency in your account for convenient access when you desire to trade it. This type makes it easier to manage your digital currency on a regular basis.
• You don't have to worry about losing a password. Hot wallets come with a seed phrase. Use it to recover your digital currency if you lose access.
• If your decision pertains to custodial wallets, then all aspects of protection fall to the provider you choose. This means that stronger security methods are involved. Moreover, if you take additional security measures in the form of a strong password and 2FA, the protection of your account will increase.
• By choosing a reliable custodial wallet provider, you will have the assurance that your assets are in safe hands, and, most importantly, there is a support service that will answer all questions.

A drawback of hot custodial wallets is that they may be compromised because they keep cryptocurrency online. Although the likelihood of this happening is low, if you properly secure your wallet.

Best Custodial Wallets

Here we’ve put together a table with the best custodial wallet providers:

Provider	Commissions	Payment Solutions	Multicurrency Capability	Platforms	Business Features
Cryptomus	Commissions Very low	Payment Solutions Built-in payment gateway, API	Multicurrency Capability Wide range of crypto and fiat	Platforms Web, mobile app	Business Features Advanced API for business, automated payments
Payeer	Commissions Low	Payment Solutions Payment processing	Multicurrency Capability Multi-currency (crypto + fiat)	Platforms Web, mobile app	Business Features Integrated exchange, support for various payment methods
Kraken	Commissions Medium	Payment Solutions Bank transfers, SEPA, SWIFT	Multicurrency Capability Multi-currency (crypto + fiat)	Platforms Web, mobile app, API	Business Features Staking, margin trading, advanced security features
Binance	Commissions Very low	Payment Solutions P2P exchange, payment gateway	Multicurrency Capability Multi-currency (crypto only)	Platforms Web, mobile app, API	Business Features Futures trading, staking, wide range of services

We recommend you try Cryptomus which is a convenient platform that provides reliable custodial wallets. You can buy more than 21 types of cryptocoins quickly and easily. The commissions are as low as 0.1%. The platform has a high degree of security; only you and the service have access to your private data. You can read more about cryptocurrency wallets here.

Non-Custodial Hot Wallets

A non-custodial wallet is a decentralized application that gives the owner full control over their funds and does not share their data with intermediaries. It feels similar to owning your own bank, but freedom includes responsibility. You are in charge of everything, which may be scary if you're a newcomer in the cryptocurrency world.

No "Forgot Password?" will help if you misplace them. Use safe passwords, keep backups, and protect your device from prying eyes.

Pros And Cons

The main advantages of non-custodial wallets are:

• There is a high degree of protection because the owner only keeps private data.
• Extra reliability due to the source code of the application.
• The capacity to transact at any time.

Drawbacks:

• In the event of a loss of a private key or seed phrase, getting access to your assets will be impossible.
• The application interface is quite complicated, so non-custodial options are better for experienced users.

Best Non-Custodial Wallets

We’ve prepared a list of the best non-custodial wallet options:

Providers	Supported Blockchains	Security Methods	Additional Features
MetaMask	Supported Blockchains Ethereum and EVM-compatible blockchains	Security Methods Password or PIN, 12-word seed phrase	Additional Features Integration with dApps
Trust Wallet	Supported Blockchains Over 70 blockchains, including Bitcoin, Ethereum, Solana, Cardano	Security Methods No information	Additional Features Supports over 9 million digital assets
Coinbase Wallet	Supported Blockchains All ERC-20 tokens, EVM-compatible chains (Avalanche, Polygon)	Security Methods Secure Enclave	Additional Features Staking for ETH, ATOM, ADA, SOL, crypto lending, dApp browser, market news notifications, NFT

In the digital currency world, MetaMask is a well-known brand. Over 30 million supporters have registered for this wallet. Like any other self-respecting platform, MetaMask is protected by a keyword. You'll also get a 12-word passphrase, which is essentially the key to funds, when you set it up.

How To Store Crypto Offline

If you prefer to keep cryptocurrency offline, then cold storage will suit you. This category includes tools that don’t have a connection to the net. There are two options: making a paper wallet (which we'll discuss later) or using a hardware wallet, which is far more popular.

Hardware Wallet

A hardware wallet is a small device that connects to a computer and stores digital savings. They need the internet only for sending and receiving cryptocurrency but otherwise remain offline, which makes them less vulnerable to hacking attacks.

Thanks to its great reliability, this approach is in high demand. Seasoned investors and enthusiasts, who want to keep their funds secure for the long term, mostly choose cold variants. Their average price is between $50 and $250.

Pros And Cons

The main advantage of a cold wallet is that it is an excellent option for storing large crypto amounts and is also suitable for long-term investments. Cold storage keeps savings completely offline, reducing the risk of hacker attacks. So, this approach offers enhanced security.

One of the biggest disadvantages of cold wallets is their inconvenience when used. Since you need to connect a cold wallet to transfer crypto coins, the process is slower than if you were to store everything online. For the same reason, this storage method is not suitable for frequent transactions. For some people, the high cost is also an essential drawback. Hardware devices are quite expensive, ranging from $50 to $250 on average.

Best Cold Wallets

Many users choose the giants in the offline storage world: Trezor and Ledger. We have compiled a comparison table so that you can better understand these options:

Company	Cost	Supported exchanges	Multicurrency capability	Device connectivity	Security	Advanced features
Trezor Model T	Cost $219	Supported exchanges Yes	Multicurrency capability 1600+ cryptocurrencies and tokens	Device connectivity USB-C	Security Physical button to confirm transactions	Advanced features Password, FIDO2, Shamir Backup
Ledger Nano X	Cost $149	Supported exchanges Yes	Multicurrency capability 5500+ cryptocurrencies and tokens	Device connectivity USB-C, Bluetooth	Security Secure chip (CC EAL5+)	Advanced features DeFi application support, built-in battery, Bluetooth for mobile

Paper Wallets

A paper wallet is one more type of offline (or cold) storage. It is often a printout of public and private keys in the form of a line of characters and a scannable QR code. Owners utilize them to make cryptocurrency transactions. They receive digital money with a paper wallet using public keys.

Though this type is comparatively secure, you can easily lose holdings in a case of theft. Create a paper wallet using programs, of which there are a great many on the Internet. It will generate the codes at random and then give you the option to print them out.

Pros and Cons

A paper wallet has the same advantage as a hardware one. It provides owners with protection by saving cryptocurrency offline. In addition, paper options are almost free, so it is an ideal choice if you need maximum security at minimal cost.

A paper wallet is vulnerable to physical damage or wear and tear. They are reasonably priced, but hackers easily target them. A thief merely needs to get hold of the paper to rob you.

How To Protect Your Crypto Wallet?

We've looked at all the storage methods, and now we know that each of them needs increased security. Let's talk about how to improve the protection of your crypto wallet.

• Use a hot wallet for small amounts of crypto to trade.
• Physically preserve recovery phrases. You can write them down, and there are steel instruments designed to record passwords. Also, never share recovery phrases or private keys with anyone.
• Learn about the security aspects before making an account. We recommend you select the platform that provides two-factor authentication or adds extra protection to your standard password.

Cryptomus is a reliable platform that provides its users with a high level of security. After creating an account, you need to pass KYC as well as enable 2FA. If you have trouble with your login or have questions about managing funds, always contact the support team for help.

FAQ

We have prepared answers to the most frequently asked questions.

What is the best way to store crypto long-term deposits?

The safest way to store crypto long-term deposits is in hardware and paper wallets. The private keys don’t leave the device, and even if your computer is compromised, crypto assets remain safe. Some people think that a cold approach may be suitable for everyone, but this isn’t the case.

Hot wallets are widely used because they are more convenient for everyday life and also fast, which is a great advantage for making transactions. When choosing a reliable provider, a hot wallet won’t be inferior to a cold one in terms of the protection of your data.

Is it possible to store Bitcoin on USB?

While it is possible to hold Bitcoin on a standard USB storage device, it’s not advisable to do so for security-related reasons. Regular USB drives are more sensitive to harmful software and hacking attacks. The best ways to keep Bitcoin are via an encrypted USB drive or a dedicated hardware wallet.

Is Coinbase safe to store crypto?

One of the safest online wallets is provided by Coinbase. They provide insurance coverage for digital assets held in hot wallets, protecting users from potential hacks. The platform offers a lot of features, such as two-factor authentication (2FA), biometric authentication, and insurance protection, to help safeguard user accounts and funds.

Can you store Bitcoin on MetaMask?

No, you can’t directly store Bitcoin on MetaMask, as it is designed for Ethereum-compatible blockchains. However, you can hold wrapped versions of Bitcoin, such as Wrapped Bitcoin (WBTC), which is an ERC-20 token on the Ethereum network. To keep real Bitcoin, you'll need a wallet specifically designed for multi-currency storage, for example, Cryptomus or others.

To summarize how to safely store cryptocurrency, start by choosing one or more crypto wallet providers. Selecting the right way depends on the goals of the crypto owner. We recommend purchasing a hardware type for most of your cryptocurrencies and downloading a hot wallet for easy access and convenience in small-amount management. Transfer money to your wallets, write down your recovery phrases, and, most importantly, keep them in a safe place.

Thank you for your attention! Write in the comments about your favorite storage approach. We will be glad to hear your opinion!