The Best Crypto Wallets: Our Favorite Billfolds for Bitcoin
When it comes to picking out the best crypto wallets, we’ll need to start by choosing between “hot storage” and “cold storage.” The difference here is pretty simple…
A hot storage wallet is connected to the internet. You can run these on a mobile device, desktop computer or in the cloud. On the other hand, cold storage wallets are a way to hold your crypto tokens offline.
Both methods have upsides and downsides. Hot storage is much easier to access. For those who are active with their cryptocurrencies, this could be the preferred means of storage. These are easier to use to trade crypto. However, accessibility can be a drawback. Because software and online hot storage wallets are connected to the internet, that makes them more vulnerable to theft. That’s why these are the targets of cybercriminals.
Cold storage takes your crypto offline completely. These digital devices give users an added level of security. They’re essentially USB drives. And getting crypto off these is about as simple as pulling that old college term paper off a thumb drive. Plus they’re secure… as long as you don’t lose it. And it’s obvious how much more difficult it is for a hacker to gain access.
Why You Want One of the Best Crypto Wallets
Crypto is similar to gold. It’s a store of value with little protection. On the other hand, money in the bank is insured by the Federal Deposit Insurance Corporation (FDIC). Assets in a brokerage account are protected by the Securities Investor Protection Corporation (SIPC). But cryptocurrencies don’t have this insurance. This is why a quality crypto wallet is so important.
Let’s walk through a scenario… You sign up for an account on a crypto exchange. One of our favorites around here is Coinbase. You then invest in a few different cryptocurrencies. At this point, you can simply leave your coins sitting in your exchange account. But most crypto traders choose against this. If the account is hacked, the crypto can be gone in the blink of an eye.
There are simple ways to try and prevent a hack. You can change the password frequently. Employing two-factor authentication is another way to guard against hackers. You can also take advantage of free password managing apps. Nonetheless, seasoned crypto investors prefer to err on the side of caution. They take their coins off the exchange and transfer them to a much more secure wallet.
The best crypto wallets add a safe place to store crypto until folks are ready to use it. It’s an added layer of complexity to ward off hackers. So naturally, it’s also an added layer of protection. And any investment – whether it’s $200 or $200,000 – warrants as much protection as possible.
It’s like the difference between walking around town with a wallet full of bills versus keeping cash at home in a safe. It’s doubtful that anyone will steal your wallet. But nobody in their right mind walks around with as much cash as they can fit in their pockets. That’s just plain reckless.
The Best Hot Storage Crypto Wallets
For those who plan to be active with their cryptocurrencies, we’ll start with our three favorite hot storage wallets. Keep in mind, these aren’t the most secure option. But they do offer robust levels of security. And that added layer of complexity is usually enough to ward off most hackers.
Coinbase Wallet
One of our favorite exchanges is also responsible for one of our favorite wallets. The Coinbase wallet is about as secure as a hot storage wallet can get. It’s intuitive and easy to use. It’s simple to send and receive crypto with. And it has multiple security features. It’s also free to register and keep crypto coins in.
The one drawback is that while it supports many of the more popular cryptocurrencies, its abilities are far from comprehensive. Those experimenting with newer or less popular cryptocurrencies might not find support in the Coinbase wallet. However, those sticking to the supported coins will quickly see what makes the Coinbase wallet one of the best crypto wallets available. And for what it’s worth, the Coinbase wallet does support more than 5,000 different tokens.
Electrum
What we have here is one of the most time-tested hot storage wallets out there. This crypto wallet has been around since 2011. But we like a lot more than just its longevity. Security has always been top of mind for Electrum. It automatically employs two-factor authentication. No information is stored on the Electrum servers. And it’s extremely easy to use.
The biggest drawback is that this wallet is starting to show its age. Despite there being more than 12,000 cryptocurrencies out there, Electrum supports only Bitcoin. This feature is long overdue for an update. But even still, Electrum remains one of the best crypto wallets available.
Exodus
This wallet is seemingly designed for crypto rookies because it’s so simple to use. But don’t let the simplicity fool you. The security features of Exodus are robust. It also allows users to set custom fees to ensure transactions go through quickly. And there’s an excellent customer service support team ready to help new users get the hang of things.
While Exodus doesn’t support all the cryptos users may want to trade, the list it does support is fairly thorough. The major gripe crypto veterans have is that Exodus isn’t an open-source wallet. This means that users have to rely on Exodus support instead of being able to research the code themselves. And there are admittedly high transaction fees for the wallet’s native crypto exchange.
The Best Cold Storage Crypto Wallets
If security is key, then look no further than cold storage. These are simply the best crypto wallets available. They’re relied upon by those storing big bucks. For those looking to get into crypto in a big way, these offer all the security features crypto traders could look for.
Ledger Nano X
This is the leading cold storage crypto wallet for a reason. It offers the ultimate security features someone could want. It’s also surprisingly easy to use. It can be managed right from a mobile device. It’s small enough to hide anywhere you’d want. Again, this is about the size of a thumb drive. Plus it supports more than 5,500 different cryptocurrencies.
The one drawback is that the Ledger Nano X is relatively expensive… especially considering there are plenty of free crypto wallets out there. Ledger also makes a slightly less expensive version called the Nano S that is another good cold storage option. If security is a priority, you simply can’t go wrong with either of these options. That’s what makes these the best crypto wallets available to date.
Trezor Model T
This crypto wallet is often back-ordered due to high demand. So delivery times from the manufacturer can be lengthy. But there’s a reason crypto traders are willing to deal with the delay. As is the case with all cold storage wallets, the Trezor Model T puts a premium on security. It also features a helpful touch screen interface and is easy to set up.
Compared with the Ledger, it doesn’t support quite as many altcoins. But it does support a healthy chunk of them. The only other drawback is that the Trezor is a bit bulky by comparison. This is mostly due to its touch screen interface. Plus, it’s even more expensive than the Ledger Nano X. But despite these drawbacks, it remains one of the best crypto wallets you can get your hands on.
KeepKey
This is the hard-working, blue-collar cold storage wallet of the bunch. Like the others, it’s easy to use. It has robust security features. And you can easily manage it from a mobile device. Compared with the others, the KeepKey is on the bulky side. But as long as you’re not carrying it around everywhere you go, that shouldn’t pose an issue.
KeepKey is also the cheapest of the cold storage wallets on our list, and it doesn’t support as many altcoins as the other wallets. Despite this, there’s still a strong argument for KeepKey as one of the best crypto wallets out there. If it supports your coins, there’s no reason not rely to on KeepKey to keep your assets secure.
The Bottom Line on The Best Crypto Wallets
For those just getting started investing in crypto, there’s admittedly a lot to learn. But those past the “toe dipping” phase know that security is tantamount and a constant concern. Anyone who’s taking digital currency seriously knows that managing risk is part of a successful trader’s strategy. And limiting the chance of a cybercriminal looting your crypto should be a part of that thought process.
Read next: A Review of the Coinbase Exchange
About Matthew Makowski
Matthew Makowski is a senior research analyst and writer at Investment U. He has been studying and writing about the markets for 20 years. Equally comfortable identifying value stocks as he is discounts in the crypto markets, Matthew began mining Bitcoin in 2011 and has since honed his focus on the cryptocurrency markets as a whole. He is a graduate of Rutgers University and lives in Colorado with his dogs Dorito and Pretzel.