There is no better method to safeguard your crypto assets than with the appropriate wallet.
According to Brent Campbell, founder and managing director of Fort Lauderdale, Florida-based digital asset investment business NXS Crypto Fund, a cryptocurrency wallet is “the keys to the kingdom.” “I remind clients that a wallet is the first step for anyone who wishes to join in the blockchain ecosystem; its goal is to save, save, and receive [crypto] money anywhere in the world, bankless.”
Most prominent exchanges allow you to store your cryptocurrency within your account, similar to how a 401(k) or IRA is stored within a Fidelity or Vanguard account. In contrast to the traditional stock market, however, crypto investors lack substantial federally regulated protections. Consequently, when the value of your cryptocurrency increases, you could profit from the additional security provided by your own wallet.
Depending on your investment plan, you may choose between a hot wallet, a cold wallet, or a wallet provided by your preferred exchange. We asked four crypto specialists what long-term investors should know about cryptocurrencies. Here are six of the top crypto wallets that long-term investors should consider, as determined by our own research and expert advice.
Electrum – The Leading Bitcoin Wallet
Electrum was created with bitcoin in mind, thus it is an excellent option if your sole cryptocurrency investment is bitcoin.
If you’re primarily a Bitcoin investor, you may want to explore a Bitcoin-specific wallet.
As a result, Electrum may be a smart choice for you, as it is simple to use and has been around for more than a decade – something that just a handful of other wallets can claim. Due to its exclusive focus on bitcoin, Electrum is worth a look if you’re looking for a bitcoin wallet.
Electrum has existed for almost a decade and was designed expressly to operate with the bitcoin blockchain, giving it speed and security advantages. Electrum’s Simple Payment Verification, for instance, allows users to simply connect to the bitcoin blockchain. Because it was designed expressly for this function, Electrum can navigate the Bitcoin blockchain more effectively than other wallets.
It may not be as user-friendly for beginners, and the major disadvantage is that it only supports BTC; if you want to store other cryptocurrencies, you should look elsewhere.
1. Exodus – Top Cryptocurrency Wallet for Altcoins
Exodus enables you to connect to various crypto exchanges while storing multiple cryptocurrency investments in a single location.
Altcoin is the umbrella name for all cryptocurrencies other than bitcoin, and there are many of them. Consequently, a suitable cryptocurrency wallet for securely keeping altcoins is one that supports a large number of them and facilitates their trading and purchase.
Exodus supports more than 180 distinct cryptocurrencies, and you may transact directly from the wallet without visiting an external exchange. Exodus may support fewer coins than other wallets, but it offers the ease of storing all your cryptocurrency in a single location and connecting to numerous exchanges. In addition, you can connect directly with other users via the wallet’s internal exchange. Consequently, it is slightly more complex than Coinbase, but Exodus has the upper hand if you would profit from the ability to traverse more coins and exchanges freely.
Depending on your security choices, you can also choose from a desktop, mobile, or hardware wallet. The hardware option is a Trezor wallet integration, which consists of a Trezor wallet running an Exodus hot wallet.
2. Trezor Model T – Most Secure Cryptocurrency Wallet
The Trezor Model T is among the best and most secure cold wallet choices for investors who place a premium on security and are prepared to pay a premium price.
If security is your top priority, experts concur that a cold storage hardware device cannot be beaten. “Move [your assets] to a hardware device if you don’t want to incur any security risks,” says Campbell, who adds that he has part of his assets on a hardware device and kept in a bank vault.
Charlie Brooks, son of Chris and CPO and co-founder of Crypto Asset Recovery LLC, asserts that Trezor is among the greatest cold wallet solutions. A cold storage solution is the most secure location to store your assets.
According to experts, a Trezor hardware wallet, such as the Trezor Model T, is an excellent option for crypto investors concerned with security. At $280, it is not a bargain. However, the Model T is distinguished by various features, including a big, full-color touchscreen display and add-ons such as Shamir Backup, a Trezor-designed security standard exclusive to the Model T. The Shamir backup enables the creation of sixteen recovery phrases for use as backups. The security standard also provides protection in the event that your wallet is lost or stolen by allowing you to restore it entirely using a recovery seed.
Similarly to Ledger wallets, Trezor products will be extremely secure, albeit in a few somewhat different ways, so it’s likely a matter of personal preference. The Model T is physically stronger and more durable, at least in appearance, which may appeal to some individuals. In addition, it is user-friendly, straightforward, and simple to set up.
3. Ledger Nano X – Cheapest, Finest Cold Wallet
The Ledger Nano X is a less expensive alternative to the Trezor Model T for crypto investors that prioritise security.
As we’ve discussed, cold wallets are the most secure way to store crypto assets, as they are not always linked to the internet and so are far less susceptible to hacking. And hardware devices such as the Trezor Model T can go a long way toward assuring the security of your assets. However, there are cold wallets that do not break the bank. We believe the Ledger Nano X is the ideal cold wallet for budget-conscious investors.
The Ledger Nano X is more cheap and can store thousands of coins than the Trezor Model T. The experts identified Ledger and Trezor wallets as the best for protecting assets. Although the Ledger Nano S is less expensive, the Nano X’s additional features and Bluetooth connectivity put it ahead of the competition. The Nano X supports a large number of tokens and coins, as well as up to 100 applications. It is an excellent option if you are an active investor interested in a variety of cryptocurrencies.
The most significant security feature of the Nano X is its Secure Element security chip, which functions similarly to the chips used to secure credit cards. The chips have received Common Criteria EAL5+ certification.
4. Metamask – the Hottest Wallet for Ethereum and Web3 Support
MetaMask is a popular, free, ethereum-based hot wallet that provides investors with better access to the blockchain and Web3.
A cold wallet is advantageous if you intend to buy and hold. But if you want to trade your cryptocurrency, you must have a hot wallet, since it will make transactions lot simpler and faster. In light of this, MetaMask has been a favourite among crypto traders due to the fact that it opens up new paths in the Web3 realm.
MetaMask is also the finest Ethereum hot wallet. Campbell states, “MetaMask operates on the Ethereum blockchain, the largest blockchain, which can communicate with [NFT exchange] OpenSea.” MetaMask provides the highest level of blockchain access.
MetaMask can connect to numerous Ethereum-based blockchain networks (such as Binance), all Ethereum-based currencies, including non-fungible tokens. It is a popular, user-friendly wallet that is compatible with everything developed on ethereum, which is a significant portion of the Web3 universe. These elements provide it an advantage over competitor wallets.
It is also simple for “Web2” customers to transition to Web3 because the mobile app is compatible with both iOS and Android smartphones, and the web extension is available for the majority of popular browsers.
It can be used to store NFTs and other collectibles, in conjunction with a hardware wallet (such as Trezor or Ledger), and to swap or purchase tokens/cryptocurrencies. If you wish to investigate NFTs and the metaverse, MetaMask is a viable option.
Best Cryptocurrency Wallets: A Comparison
Does Cryptocurrency Ownership Require a Wallet?
You do not need a crypto wallet to hold bitcoin, particularly if you have a little amount and are new to exchanges and the crypto world. But if your possessions are growing and you desire more security and control, now may be a good moment to choose the appropriate wallet. Especially if you are confident in your knowledge of private and public digital keys and other aspects of cryptographic security.
Bec Jones, CEO and co-founder of blockchain-app developer Clutch Wallet, describes the wallet as a portal into the crypto universe. It is the first thing you download and the first thing you require.
Jones explains that a digital wallet is similar to a physical wallet in some aspects, but although a physical wallet may include cash, credit cards, and even photographs of loved ones, a digital wallet may store the online equivalents, such as cryptocurrencies, NFTs, and more.
Obviously, digital wallets are not made of leather, but rather, strings of code – they are software or an application (sometimes real hardware as well) installed on your computer or mobile device. The majority of crypto wallets, according to Jones, provide basic functionality such as exchange and send choices and the ability to make purchases within the wallet. Many also permit users to link debit and credit cards.
However, digital wallets, like their physical counterparts, come in several forms. One of the most striking characteristics is custody.
Comparing Custodial Wallets to Noncustodial Wallets
The primary distinction between custodial and noncustodial wallets is that the private key of a custodial wallet is held by a custodian or third party. For instance, if you obtain your wallet from a cryptocurrency exchange, it is most likely a custodial wallet, and the exchange most likely keeps the keys.
A noncustodial wallet is privately held by its owner, meaning you are alone responsible for the management of your assets. Using a noncustodial wallet would be equivalent to storing cash in a personal vault instead of a bank. The problem, however, is that if you lock yourself out of the vault, there is little chance that you will be able to retrieve your assets, as no third party can assist you.
New crypto investors face a steep learning curve, and the stakes are huge. For instance, your money may be at risk if you do not know how to protect your sensitive information, according to crypto specialist Wendy O.
So, if you are a novice crypto investor, Wendy O suggests using an exchange-issued custodial wallet.
Hot Wallets versus Cold Wallets
The distinction between cold wallets and hot wallets is another essential concept to comprehend.
The major distinction between hot wallets and cold wallets is that hot wallets are linked to the internet or keep assets in the cloud (i.e., “hot”), whereas cold wallets are not and are typically encased in hardware, such as a flash drive. Therefore, a cold wallet is immune to hacking efforts and provides a nearly impenetrable layer of security for its contents, barring the theft of the hardware.
“A cold storage solution is the safest place to save your funds,” explains Chris Brooks’ son and Crypto Asset Recovery’s CPO and co-founder, Charlie Brooks.
In contrast, a cold wallet carries the risk of losing both the physical device and the bitcoin it contains. Consequently, there is a trade-off for this additional security, which is why some investors keep their cold wallets locked away in safe deposit boxes or even a home safe.
How to Pick a Cryptocurrency Wallet
When making a decision, you will need to know whether a crypto wallet is custodial or noncustodial, whether it is hot or cold, and what currencies or tokens it can store.
You will also need to consider the pricing. Some cryptocurrency wallets can be purchased for a one-time price, while others charge fees for transferring funds in and out.
Campbell suggests that you might narrow down your options by evaluating how long wallets have been available. “Consider how long each wallet has existed. Are they combat-tested?” he inquires. And verify that a wallet supports the cryptocurrencies you wish to acquire. “Not every wallet can purchase every token,” he explains.
Considering your securities preferences and trading/investing activities, you should generally examine the following elements to limit down your selection:
- Custodial vs. noncustodial (self-custody)
- Type of storage: hot versus cold
- Number of coins and tokens supported
- Purchase fees or costs
- How to Secure Your Cryptocurrency Wallet