9 Best Crypto Wallets of April 2024

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Best Crypto Wallets of 2024

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What are Crypto Wallets?

Crypto wallets store the private keys to your digital assets, which essentially work as a password that lets you or another person access your crypto. By keeping your private keys safe and secure, crypto wallets decrease the chances of your crypto being accessed by a third party, hacker or thief.

While crypto wallets let you organize and store your crypto all in one place, they don’t actually store your cryptocurrency inside. Instead, your digital assets exist on the blockchain. The crypto wallet is used to enhance the security of your assets and potentially even buy, sell or trade coins directly from where they live.

There are several types of crypto wallets, including non-custodial wallets and custodial wallets. Where non-custodial wallets let you maintain total access to your private keys, custodial wallets hold the keys to your crypto on your behalf.

An example of a custodial wallet includes any crypto exchange that lets you buy or sell cryptocurrencies like Coinbase, Binance or Crypto.com. These exchanges make it possible to get into crypto trading with ease, and they safeguard your private keys on your behalf until you decide to move your assets to a non-custodial wallet that lets you manage your private keys for better security.

How Do Crypto Wallets Work?

While different crypto wallets have their unique functions and features, these wallets make it easier to manage and oversee all your assets in one place. Some crypto wallets let users buy, sell and trade crypto directly or through a connected exchange, whereas others are geared to long-term storage.

There’s a difference between private keys and public keys when it comes to crypto. Where private keys work as a security password to secure your crypto assets, public keys are shared widely and make it possible to receive a crypto transaction. Every crypto wallet has both public and private keys, and the private keys are what keep your digital assets secure.

Types of Crypto Wallets

The best crypto wallet depends on your long-term goals, as well as how you want to access your crypto. Cold wallets are known for offering the best possible security for your assets since they store crypto off the internet while hot wallets offer fast and easy access, which is good for everyday trading.

	Hot Wallets	Cold Wallets
Connection	Connected to the internet	Stores crypto entirely offline
Vulnerability	Can be hacked online	Nearly impossible for hackers to access
Access	Typically accessed on a desktop or mobile device	Typically plugged into a computer, but only as needed
Examples	Web-based wallets, mobile wallets and desktop wallets	Hardware wallets and paper wallets
Cost	Storage is often free; trading and network fees can apply	Upfront cost required ($50 or more) for cold storage device

Hot Wallets

A hot wallet, also known as a software wallet, is a type of crypto wallet that’s connected to and accessible via the internet. Hot wallets are meant to organize and protect your digital assets, and some let you buy, sell and stake crypto directly from the software or through a connected exchange. Software wallets store your private keys for you, which you can access directly or with a special security phrase you set up ahead of time.

Because hot wallets can be accessed on a desktop or your mobile device with ease, they are a popular option for people who are new to crypto investing. Some hot wallets also provide easy access to cold storage options like Ledger, which means you can use them for buying, selling and trading and periodically move some of your crypto to cold storage for safekeeping.

Hot wallets have some potential downsides, including the higher potential for cyberattacks and hacking via your internet connection. Most hot wallets offer additional security features like multi-factor authentication to reduce potential threats, but the chance of losing crypto to fraud still exists.

Cyberattacks, hacking and other types of crypto fraud typically take place with hot wallets and crypto exchanges that are accessed over the internet. There have been numerous instances of hot wallet hacking schemes over the years that have led to billions of dollars in crypto losses. Some crypto scams have even been perpetrated by crypto platforms themselves, which includes the notable downfall of crypto platform FTX.

Cold Wallets

Cold wallets work as a vault to protect your crypto and your private keys. These wallets can be basic paper wallets, which are pieces of paper that have your private keys and corresponding addresses as QR codes printed for storage.

Cold wallets are also physical devices, which is kept offline and only plugged into a computer when the crypto needs to be accessed. While traditional cold wallets that use a device for storage enhance crypto security dramatically, there are still downsides.

For example, you could expose a hardware wallet to hacking if you inadvertently connect it to certain apps and services when you plug it in There’s also the potential to simply lose the device or to have it stolen. In either scenario, your device may be gone forever but that doesn’t mean your crypto will disappear with it. As long as you maintain access to the recovery phrase you use to access your cold wallet, you should be able to regain access to your crypto by acquiring a new hardware device.

Why Would You Need a Crypto Wallet?

Here’s a rundown of some of the reasons you will likely need a crypto wallet in the future if you don’t have one already.

All Your Coins In One Place

One of the biggest benefits of most crypto wallets is that you can store numerous cryptocurrency in one place. If you hold Bitcoin but also have Ethereum, XRP and Dogecoin that you’ve purchased on various exchanges, for example, you could find a single wallet that supports all of these assets and store them all together for convenience and peace of mind.

In a sense, using a crypto wallet is a lot like using an investment tracking platform that lists your taxable investments, retirement accounts and long-term savings all in one place. By being able to see everything you have at once, you could better position yourself to invest more strategically or discover holes in your long-term investment plans.

Enhanced Account Security

Crypto wallets are considerably more secure since they hold your private keys and let you access your crypto with a security phrase, whereas crypto kept on an exchange may be accessed with nothing more than a basic log-in and password.

Crypto exchanges also keep your crypto out of your direct control, which makes your assets more vulnerable to fraud or human error. Cryptocurrency does not come with Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA) insurance like the cash you store in a traditional bank account, money market account or certificate of deposit (CD). At the end of the day, a concern for safety and an overall desire to have more control over digital assets is the main reason people opt to keep their crypto in a wallet for the long haul.

Make Payments with Ease

Crypto wallets also make it considerably easier to hold crypto you want to use for payments later on. This is true whether you want to send crypto to others or use it for a purchase. These transactions can take place without a bank working as a middleman, so costs can be minimal.

Some crypto wallets even come with a debit card that lets users use their crypto to fund purchases. But the ability to make payments or send money with a crypto wallet depends on the type you have and the functions it includes.

How to Create a Crypto Wallet

If you want to create a hot crypto wallet or a software wallet, there are plenty of steps you’ll need to take to get started. The following moves can help you shore up security for your crypto while making it easier to manage all your assets in one place.

• Step 1: Find the best crypto wallet. Compare each type of cryptocurrency wallet based on its features, costs and the assets it supports. Ideally, you’ll choose a software wallet with the functionality you need, whether you are a long-term investor or active trader.
• Step 2: Download the app or desktop version. Download the mobile app, desktop version or both if available. Many crypto investors opt to use both a desktop and mobile version if possible so they can manage their assets at home and on the go, and potentially even make last-minute trades and exchanges when they need to.
• Step 3: Create an account. Set up an account with a username and password that would be impossible for others to guess. To create an account, you’ll need to provide information about yourself that can vary depending on the wallet you choose. Non-custodial wallets may not require you to provide much of anything when it comes to personal information, not even an email address.
• Step 4: Set up security features. Set up enhanced security features that are available to you, including multi-factor authentication when possible. Make sure to write down your private keys and set up a password phrase that only you would know. Consider storing this information in a secondary location that is also secure, such as a physical safe that only you have the access code to.
• Step 5: Transfer your assets. Finally, you’ll want to transfer all your cryptocurrency to your wallet. For example, you can move crypto to your wallet via a bank account, cryptocurrency exchanges or simple transfers from another wallet. Some wallets provide a QR code that makes it easier to transfer crypto between wallets with a simple scan.

Crypto Wallets vs. Crypto Exchanges

It’s easy to confuse crypto wallets with crypto exchanges, especially since some providers in this space have both. For example, Coinbase customers can use the crypto exchange to buy, sell and manage all their digital assets. From there, they can set up a Coinbase wallet that stores all of their cryptocurrency, NFTs and digital assets with optimal security and full control of their private keys.

The differences between crypto wallets and exchanges boil down to the fact that crypto exchanges are mostly for active trading of digital assets. While some crypto wallets also let users exchange crypto or swap coins through various methods, wallets are geared to long-term storage.

Crypto exchanges are also typically custodial, meaning the exchange holds your private keys and takes charge of your account security. Crypto wallets are typically non-custodial, so you have control of your private keys and enjoy more security overall.

	Crypto Exchange	Crypto Wallet
Account Security	More vulnerable to online threats	Less vulnerable to online threats
Private keys	Held by the exchange	Typically held by the investor
Trading	Users can buy, sell and trade crypto directly through the platform	Users may need to connect their wallet to an exchange to trade assets
Recovery	Help recovering passwords from the exchange	May lose access to your crypto if you forget or lose your security phrase
Learning curve	Easy to set up and start trading	May require more experience to use