One of the most important aspects of investing and trading cryptocurrencies is choosing a trusted place to store your holdings. The storage location should be easy to use and protect your money from hackers.
There are two main ways to store crypto:
- Cold wallets.
- Hot wallets.
Now let’s talk about where cryptocurrencies should be stored for different purposes.
Hot Wallets
Hot wallets are the online storage of cryptocurrencies, for example, a cryptocurrency exchange platform wallet. All major and reliable cryptocurrency exchanges offer their wallet storage – WhiteBIT wallet, Binance wallet, etc. These are centralized exchanges that guarantee high security for users’ funds. These wallets are multi-layered and protected and cannot be accessed by third parties.
Online wallets are suitable for traders who want to trade cryptocurrencies on a daily basis. Online wallets are necessary for the following cryptocurrency trading strategies, for example:
- Day trading
- Scalping.
That means you can store crypto and access them whenever you want to buy or sell them. Online wallets can be installed on smartphones, which is very convenient as you can trade on the go.
Cold wallets
How to store cryptocurrency offline? The answer is a cold wallet. If you’re not interested in trading and just want to buy and hold cryptocurrencies, you’re probably looking for a way to store crypto offline. It can be a ledger or other device that can connect to the internet when needed. At all other times, it remains offline. It is not suitable for day-to-day transactions, but it offers good protection for your investment.
It is recommended to keep a portion of your investment in a cold wallet and the rest in a WhiteBIT wallet. This cryptocurrency exchange platform holds 96% of its clients’ funds offline, while the remaining 6% is in circulation. In addition, WhiteBIT has an insurance fund that protects clients in case of hacking.
