How to Store Your Cryptocurrencies Safely in 2025

Storing cryptocurrencies safely is one of the most important responsibilities any crypto owner can have. As opposed to real money, cryptocurrencies are digital assets. They must be digitally stored and in a safe environment.

Cryptocurrencies are not backed by banks or central authorities. This means if you don’t store your digital assets properly, you’re leaving them vulnerable to theft, loss, and hacking.

There are several ways to safely store cryptocurrencies. Choose the method that caters to your needs.

Custodial wallets storage

Custodial wallets are digital wallets where a third party stores the cryptocurrencies on your behalf. Some of the custody wallets also offer insurance against theft or exploits, which offers greater protection for your digital holdings.

How do custodial wallets work?

You sign up with a service provider. The third party holds the wallet’s private keys. You may receive and send cryptocurrencies from the custodial wallet. The private key provides anyone anywhere in the world access to your cryptocurrencies.

When it is kept secured by a third party, the risk of anyone gaining access to your account using the private key is significantly reduced.

Crypto custody services and wallets

These are some of the trusted custody services for your cryptocurrencies as of 2025.

1. Coinbase Prime (also known as Coinbase Custody)
2. BitGO
3. Gemini Custody
4. Cobo

Custodial wallets pros and cons

Pros

1. The custodian handles key storage.
2. Advanced security measures, like multi-signature and cold storage, are common.
3. Wallets and transaction history are automatically backed up.
4. The best crypto exchange platforms offer insurance for stored assets.

Cons

1. Custodial wallets may charge account management fees, including transactions.
2. Privacy concerns: Personal data is required, compromising privacy compared to self-custody.
3. Some custodial services often require over $100,000 worth of digital holdings to set up the account.

Custodial wallet safety tips

• Choose reputable custodians: Use trusted, established services.
• Monitor account activity: Regularly check for unauthorized transactions or access.

Non-custodial (self-custody) wallets storage

Self-custody wallets, called non-custodial wallets, allow you to store and manage your cryptocurrency without depending on a third party. With this type of wallet, you are the only one who holds the private keys.

Many who do not wish any third party holding the keys to their wallets would prefer this method for strong their cryptos.

How do self-custody wallets work?

Self-custody wallets allow you to manage your crypto assets independently. You have the keys to access the wallet, and no one else has them.

Take website hosting as an example. Hosting providers offer you different hosting solutions while providing you with the server. In non-custodial wallets, the private key is your server.

1. When you create a self-custody wallet, you are given a private key or seed phrase. This key lets you access the wallet and set the password.
2. Since you are in charge, you must protect your private key. Losing it means losing access to your funds.
3. Blockchain interaction: These wallets connect directly with the blockchain, letting you send, receive, and store cryptocurrencies securely.

Types of self-custody wallets

A lot has changed since the first-ever crypto wallet, Bitcoin Core, was introduced in 2009. Since then, the crypto wallet landscape has grown rapidly, with many options now available to cater to different user needs.

1. Hot wallets (Software-Based): MetaMask, Exodus
2. Cold wallets (Hardware-Based): Ledger, Trezor Models.

Self-custody wallets are great for those who want full control and enhanced security over their cryptocurrency.

Non-custodial wallets pros and cons

Pros

1. You own your private keys and control your funds.
2. No personal info is required for transactions.
3. No dependency on third parties.
4. Supports blockchain and decentralization principles.
5. Offers multi-signature and hardware wallet integration.

Cons

1. Losing your private key means losing access to funds.
2. Setup can be confusing for new users.
3. No insurance for lost or stolen funds.

Non-custodial wallets safety tips

Secure Keys Offline: Store private keys and seed phrases in a safe, offline location. Never share them.

Update Regularly: Keep your wallet app updated for better security. 

Paper wallets storage

Paper wallets are a secure and offline method to store cryptocurrency, making them immune to online threats such as hacking. Here’s what you need to know:

What is a Paper Wallet?

A paper wallet is a physical document containing the public and private keys needed to access and manage cryptocurrency. 

Paper wallets are created offline using special software, which helps protect the keys from online threats like hacking. The keys are then printed on paper, and the paper is stored safely. This offline nature makes paper wallets a secure method for long-term cryptocurrency storage.

Writer’s note: Brain wallets were an early alternative to paper wallets, where users memorize a passphrase to generate a private key. However, they are now less common due to the risk of forgetting the passphrase or making generation errors.

How does a Paper Wallet work?

1. You generate the keys offline using special software, often on a device that has never been connected to the internet. For a Bitcoin paper wallet, bitaddress may be used.
2. Save the file (often in a ZIP file) while offline. Ensure you are still disconnected from the internet and open the index.html file in your browser.

Paper wallet generators may also be available on GitHub for the more tech-savvy.

Paper Wallets pros and cons

Pros

1. Paper wallets are immune to online threats.
2. You control your keys without relying on third-party services.
3. Paper wallets require basic software and a printer.
4. They offer secure long-term storage when stored safely.
5. It can be stored in various locations for added security.

Cons

1. Vulnerability to physical damage: Paper can be damaged by fire, water, or other factors.
2. If the keys are lost, funds cannot be recovered.

Paper wallet safety tips

1. Store securely in a fireproof safe or deposit box.
2. Use a strong, unique password for encryption.
3. Generate offline; avoid public Wi-Fi.
4. Verify keys before relying on the wallet.

How have people lost their stored cryptocurrencies?

Over 22% of all Bitcoin, approximately 4.2 million BTC, is considered lost. This includes coins locked away in wallets with forgotten credentials or lost private keys. The tragic part is that better storage practices could have prevented many of these losses.

One high-profile example is Stefan Thomas, a German programmer, lost access to 7,002 BTC, worth over $700 million, after misplacing the password to his encrypted USB drive. Similarly, James Howells, a British IT worker, threw away a hard drive with 8,000 BTC in 2013 and has been unable to recover it, despite offering a reward.

Poor cryptocurrency storage can lead to significant losses, with recovery rarely possible and often requiring expert assistance and luck—though it’s usually impossible.

Include cryptocurrencies in your will if you choose self-custody wallets

Without proper planning, your digital assets could be lost, as seen in the QuadrigaCX incident in 2019. After CEO Gerald Cotten’s death, users lost 26,350 BTC worth over $2.6 billion because Cotten held the private keys alone. This highlights the importance of planning for crypto after death.

To ensure your cryptocurrency is accessible after death, securely store your private keys and recovery phrases and share access with trusted individuals. Include instructions for wallet access in your estate plan and consult an estate planner with cryptocurrency expertise to ensure proper legal arrangements.

Some exchanges, like Coinbase, allow you to access a deceased family member’s account if you provide certain documents, like a death certificate and the will. But it’s always best to plan ahead.

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