Did you know that over $2.17 billion has been lost by the crypto community in 2025 to hackers so far? The message here is absolutely clear: learning and practicing crypto safety are no longer optional; it is necessary for the fight against hackers and attackers who will steal your assets.
Crypto owners are always at risk due to evolving phishing scams. Bot accounts lure unsuspecting people into hacking traps, and even some instances of physical attacks on crypto owners to steal their funds from their wallets. This makes safe storage a necessity for crypto owners.
But what are the ways by which one can store their crypto assets safely? We hope to answer that today.
How Does Crypto Storage Work?
To store your crypto assets, you need crypto wallets. Crypto wallets are tools that allow you to store various cryptocurrencies. However, unlike real physical wallets, you can’t store coins in your crypto wallet; rather, they store keys that give you access to your crypto asset on a blockchain.
The keys stored in your crypto wallet can be divided into two categories: private and public. The private key works as a passcode to access your account, and if leaked or hacked, the person with this key can wipe your crypto wallet.
The public key is derived from the private key and acts as your bank account number. People can send you cryptocurrencies, but can’t access your crypto wallet through it. Similarly, wallets can be divided into hot and cold wallets.
Cold wallets or hardware wallets are offline, while hot wallets are online.
The Safest Ways to Store Your Crypto in 2025
Saving your crypto assets from hackers should be your primary concern in 2025 as a crypto trader. While there are a lot of ways to store your crypto assets safely, ranging from online to offline wallets, there is no one-size-fits-all solution here.
We will be discussing all the options available with their pros and cons, and will help you decide which one is a better fit for you.
1. Hardware Wallets (Cold Storage)
Hardware wallets or cold storage are known as the impenetrable vaults of the crypto world. The purpose of cold storage is to keep your private keys offline, thus saving them from online hacks, phishing, or any other malicious activity.
Hardware wallets only store private keys. You can’t store your crypto assets in them as they are always on the blockchain. Hardware wallets connect your devices via Bluetooth, NFC, or USB. They sign the transactions with your private key inside them, thus never allowing the private key to access the internet.
This signed transaction is then sent to your phone and then to the blockchain. Various companies like Ledger, Trezor, Bitkey, and Tangem provide these hardware wallets.
However, hardware wallets are not without their downsides. If you lose the device and the recovery phrase, you will lose all of your crypto assets. They are slow and not ideal for frequent trading. Being a physical device, hardware wallets tend to be costly.
2. Paper Wallets
The oldest yet the safest way to save your passwords is a piece of paper with your private and public key written on it. It is the cheapest method as you will only need paper and ink.
To print a paper wallet, use a secure computer and ensure that it is never connected to the internet. Download any trusted wallet generator (offline version). Generate your wallet keys and print them on paper as a QR code or alphanumeric strings.
However, having a paper wallet is a huge responsibility for the owner. If you lose the paper and don’t have a copy or a duplicate, you will lose access to your assets.
3. Air-Gapped Computers
Air-Gapped Computers is a DIY process to save your crypto assets. These computers are never connected to the internet, any USB device, or Bluetooth tethering that is not yours, and are kept away from everyone’s access.
To set up an Air-Gapped Computer, remove all the modems and internet devices. Make sure to use a brand-new HDD or SSD. Install an OS and never connect it to the internet. Download an offline key generator from a trusted source on another machine. Once done, generate your keys and either print them out or keep them on your computer.
While it seems similar to a hardware wallet, the fundamentals are different. You don’t connect any device to use the internet on your computer. To make a transaction, you will manually input the keys. This method is complex, costly, and time-consuming, but it is a perfect fit for people prone to cyberattacks.
4. Multi-Signature Wallets
Multisig wallets add a layer of security by requiring multiple private keys to access your crypto vault instead of a single key.
It works by generating M keys with a minimum of N keys required to open the vault (N-of-M). Each signer holds a private key and is required to input it to access the vault. This technology can be implemented in blockchain via smart contracts.
Multisig is the best way to save your crypto for people with shared crypto accounts, like businesses or families. However, it is a very complex process and can delay transactions if someone is not available at the time. Losing multiple keys, though unlikely, can happen and will lock you all out of the shared account.
5. Custodial Vaults
Custodial vaults are crypto security solutions provided by vendors like Coinbase Study, and Anchorage Digital Bank. These third-party vendors offer costly vaults to save your private keys, which can only be accessed by custodians.
While this seems similar to Multisig, it is different as the owners do not use the keys. They are held and used by custodians, who are a part of a larger network designed to protect the crypto assets of their clients. It is an extremely advanced and sophisticated cold storage for large investors who require security over all.
The transactions are often time-delayed to ensure there is no malicious activity. These companies are insured and work with regulatory compliance. However, this is best for advanced and experienced traders.
Less Secure Ways to Store Your Crypto
Not every crypto owner can access or use cold wallets, either due to cost or their inability to perform fast transactions. For this purpose, various other methods are available to safely store your crypto. While these methods are not inherently bad, they are less secure and can compromise your accounts if not used carefully.
Software (Hot) Wallets
Software wallets, also known as hot wallets, are a favorite of crypto enthusiasts due to their online availability and easy-to-use interface. These are apps or extensions that you can use on your mobile devices or PCs.
Software wallets allow fast access to your crypto accounts with a single click, and you can connect them directly to dApps. However, being online 24/7 is a massive security risk. You can fall victim to hacks, SIM swaps, or phishing easily.
Storage on Crypto Exchanges
Crypto exchanges or CeFi systems allow users to hold a large amount of crypto assets on them. You can access these assets by visiting the apps and can make transactions with a single click. The exchange manages all the security, and you need to pay a small fee for their services.
This sounds good on paper, but giving a single company access to all of your assets and keys is not a good approach. In case of liquidation or a hack on the company, you will lose all of your crypto assets in a second. Certain government regulations can also lead to the freezing of your account.
Type of Crypto Storage Depends on the Following Factors
There is no one-wallet solution for everyone. Every crypto trader has different needs, approaches, and geopolitical circumstances that govern how they store and use their crypto assets.
To find the best match for your needs, you must look at the following factors and decide which approach best suits you.
How Often Do You Trade or Transact
Do you make multiple transactions a day or limit yourself to a couple per month? This is the most important question to ask yourself before deciding the safest way to store your crypto.
If you are a frequent user who makes a lot of transactions, you can’t go with a more secure but slower cold storage. Your best option in this case is a hot wallet, despite having weaker security, as it not only saves your time but also allows you to remain ahead of the competition.
For people who believe in a low number of crypto transactions and are okay with delays, cold storage is their best bet.
Amount of Crypto You Want to Store
For people with smaller amounts in crypto assets like 500$, hot wallets are a good choice. They are cheap and allow you to build your portfolio faster.
However, someone with a large amount of cash in crypto assets like 10,000$ should go with cold wallets. As large amounts and big accounts are a primary target for hackers, you will be safe from them while keeping your private keys offline.
For corporates or people with over 100,000$ in crypto assets, go full vault mode. Either get custodial vaults or air-gapped computers to save your fortune from malicious people.
Technical Prowess
Are you a tech-savvy person or is the new technology is bane of your existence? If you are someone who is a newcomer to crypto or feels overwhelmed with technology, go with hot wallets. They are user-friendly and even offer apps that allow you to save your assets and make trades with a simple click.
For people who love to go through hardware and software, air-gapped computers are a much better option. They can also opt for cold wallets, as it is difficult to cheat them with a malicious USB or Bluetooth connection.
Desired Level of Privacy and Anonymity
It also depends on what kind and level of privacy you are looking for. If you want ease-of-use by sacrificing privacy, you can go with CeFi companies that are KYC compliant, like Coinbase.
If privacy is your main concern, you can use non-KYC compliant wallets like Samourai wallet. You can also use privacy-first tools to further enhance your privacy and control. These tools include VPNs, DEXs, and privacy coins.
Ease of Recovery
Recovering a crypto wallet in case of lost access or a hack is of utmost importance. You can use a seed phrase-based wallet, which can be recovered by using a 12-to 24-word seed phrase.
Hardware wallets also offer seed phrases as they work offline. Custodial wallets (KYC) offer 2FA, email recovery, and technical assistance to recover your account. Professionals handle this method, and you can sit back and relax while they do their work.
Travel Needs
If you are a frequent traveler, keeping cold wallets is a risky gamble, as you can lose them easily. For such people, hot wallets are the key. If you are more likely to stay at home, cold wallets, even an air-gapped computer, should be a preferred choice.
How to Keep Your Crypto Safe
Keeping your crypto wallet safe should be your priority in 2025. This can be done by being extra cautious while using apps on devices with internet, avoiding logging on to your accounts on public devices and open networks, making secure backups of your paper wallets, and not trusting anyone with your private keys.
We will be discussing the best practices you can employ for both cold and hot wallets to survive the onslaught of hackers.
Cold Storage Best Practices
- Only buy hardware wallets from reputable sellers and make sure they are new.
- Don’t connect a compromised device to your cold storage.
- If you are using an air-gapped computer, make sure to use new storage that is never exposed to the internet.
- Add pin to your cold wallets in case someone accesses them physically or they are stolen.
- Make multiple copies of your seed phrases on paper and keep them safe in lockers.
- Use demo accounts or small amounts initially to check the recovery of your preferred cold storage.
- Don’t allow people or relatives to access your cold wallets. Treat them as gold and keep them away from other people.
Hot Storage Best Practices
- Only use trusted apps with a proven history and a good pedigree.
- Use unique and complex passwords for your hot wallets.
- Avoid using the same password for multiple accounts. This can be catastrophic.
- Always enable 2FA and get code on a SIM with no internet access (if possible).
- Keep all of your apps up-to-date for better security.
- Don’t click on shady links or ads on your mobile or pc browser.
- Avoid public internet to access your hot wallets or crypto accounts. Use GSM data if you must make a transaction while away from your wifi.
- Keep a separate phone or PC for your crypto transactions.
- Monitor your account regularly. In case of any fishy activity, contact your wallet provider immediately.
Can Cold Storage Wallets be Hacked?
While cold storage wallets are considered the top-of-the-line security for your crypto assets, they can be compromised in various ways, despite being offline all the time.
Physical Theft: It is easy to lose your paper wallet or cold wallet to a physical theft. While it is a serious criminal offense, the time between the theft and the perpetrator’s getting caught is crucial. Make sure to have an additional pin on your cold wallet and never keep the paper wallet in your pocket.
Compromised Connection: If you use a mobile phone that is compromised to connect to your cold wallet to make a transaction, it can potentially lead to your keys getting exported and hacked.
Outdated Devices: Using devices with third-party firmwares or those that have been tampered with can result in you losing all of your keys easily.
Is the Hybrid Approach (Cold + Hot) the Best Way to Store Crypto?
The best and teh safest way to store your crypto is to use a hybrid approach. It involves smartly combining cold storage with hot wallets.
Crypto assets that you want to store for the long term and are more valuable should be moved to cold wallets. Keep them offline and make hard copies of their keys in different places, not accessible to anyone else.
For quick trading, keep some crypto assets in hot wallets and use them daily. Not only will this allow you to protect your crypto empire, but you will also gain experience in both worlds and learn to secure your assets more wisely in the future.
To Wrap Things Up
Crypto is both a fascinating and scary world. Hackers and scammers are always looking to exploit or steal from vulnerable people. The best way to protect your crypto assets is by storing them in multiple wallets.
Long-term assets are in the cold storage, and short-term assets are in the hot storage. You can also employ practices mentioned in the guide to secure your wallets from intruders.
The best advice we can give is to review your setup as soon as possible. Write down the flaws it has and match them with our guide to see how you can improve them. You can also join Dypto-Crypto with a free login to get the latest updates and the weekly newsletter to read about the latest advancements in technology and cybersecurity.
We also offer extensive courses and free guides, which can help you take your crypto knowledge to the next level. So, what are you waiting for?
Frequently Asked Questions (FAQs)
Q: Can you lose crypto in a cold wallet?
A: Yes. Factors like physical theft or compromised devices can lead to you losing your crypto in cold wallets.
Q: What is the best way to store cryptocurrency safely?
A: A hybrid approach that uses both cold + hot wallets. You can store long-term assets in a cold wallet and short-term assets in a hot wallet.
Q: Are paper wallets still a good option in 2025?
A: No, as major providers have discontinued them and are no longer updated.
Q: Is a ledger the safest way to store crypto?
A: Ledger is one of the safest ways to store crypto due to its offline nature and the inability of hackers to access the keys stored in it.
Q: Can cold/hardware wallets be hacked?
A: Yes, if you connect a compromised mobile or PC to them to make a crypto transaction. Hackers can extract the keys from the transaction in this case.
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