5 Best Hot Wallets of December 2024
Hot wallets are connected to the internet and are often available as a standalone product or as an add-on through popular crypto exchanges.
Hot wallets make it easy to execute crypto transactions. But since hot wallets are hosted online, they are more vulnerable to hackers. That’s why some users look to place their crypto in cold storage as a long-term solution.
Summary - 5 Best Hot Wallets of December 2024
3 Best Cold Wallets of December 2024
Cold wallets are physical gadgets, and some even look like USB sticks. Whatever their form factor, a cold wallet provides a place to store your crypto ownership keys that is not connected to the internet.
Summary - 3 Best Cold Wallets of December 2024
Best Bitcoin Wallets of December 2024
Bitcoin remains the top cryptocurrency by market capitalization. Whatever the vicissitudes of the crypto market, investors remain committed to bitcoin as both a buy-and-hold asset and as a means of transaction.
Like other cryptocurrencies, bitcoin requires a crypto wallet for storage, and most of the leading crypto wallets—hot or cold—support BTC.
There are a few specialized wallets that do not support bitcoin. MetaMask, for instance, does not directly support bitcoin, as it is designed only for Ethereum-based crypto tokens. Other wallets may have a few quirks. Coinbase Wallet Web3 only supports bitcoin in its mobile app, for example.
Conversely, some crypto wallets are solely dedicated to the big “B.” Electrum only supports bitcoin. If that’s going to be the only crypto you keep in your portfolio, it’s a reasonable choice. It has never experienced a hack; plus it’s integrated with Ledger and Trezor.
Here are some leading crypto wallets that support bitcoin and other top major cryptocurrencies by market cap.*
| Crypto Wallet Name | Wallet Type |
|---|---|
| Coinbase Wallet Web3 | Hot |
| Crypto.com DeFi Wallet | Hot |
| Exodus | Hot |
| Ellipal Titan | Cold |
| Ledger | Cold |
| SafePal | Cold |
*At the time of this writing, the top major cryptocurrencies (excluding BUSD) by market cap: bitcoin, Ethereum, Tether, USD Coin, BNB, XRP, Cardano, Solana, Dogecoin, Polkadot, Dai, Polygon, Shiba Inu, Tron and Avalanche.
If you’re looking for a crypto wallet that supports Ethereum and bitcoin—but some of the other major cryptocurrencies—Robinhood’s new Web3 Wallet or eToro’s exchange wallet might be a good fit.
Methodology
Forbes Advisor performed an in-depth assessment of the features and options offered by the leading crypto wallets.
From the data gathered, each wallet was scored and assessed based on seven key variables:
- Stablecoins. The number of popular stablecoins supported.
- Top cryptocurrencies. The number of supported major cryptocurrencies by market capitalization.
- Usability. The approach for this metric differed for Best Exchange/Hot Wallets and the Best Cold Wallets. But both types of wallets were measured for exchange integration(s) and staking accessibility.
- Customer service. Types of customer support available.
- Costs and fees. Fee structures were assessed differently for Best Exchange/Hot Wallets and Best Cold Wallets.
- Security. Some of the features assessed include whether the wallet recoups stolen assets and provides several security measures (e.g., two-factor authentication, password encryption, etc.).
- Additional features. Other areas measured include, but are not limited to, whether the wallet provides educational resources and live charts and support for non-fungible tokens.
For each ranking, the sum of weighted values across all or some of these key factors was calculated to award each crypto wallet an overall rank.
Guide to Crypto Wallets
What Is a Crypto Wallet?
Cryptocurrency is a highly abstract store of value, and ownership exists as nothing more than a string of code on a larger blockchain.
When you purchase a crypto, such as bitcoin or Ethereum, your ownership boils down to a public key and a private key.
The public key is like your bank account number but doesn’t provide access to your crypto. The private key identifies you as the “true owner.” If you lose your key, you could lose access. Likewise, the person holding a private key has full access to your crypto.
There’s a popular expression in the crypto world, “Not your keys, not your coins.” If you don’t control your keys, you don’t have full access to your crypto assets.
How Do Crypto Wallets Work?
Crypto wallets work by storing the private keys for your cryptocurrencies. A wallet holds the credentials needed to prove you own the cryptocurrencies. You can also use the wallet to send cryptocurrencies to or receive them from others.
There are different types of crypto wallets, ranging from online services and programs to simply printing the keys on a piece of paper. The key function is that the crypto wallet holds the keys needed to access the blockchain to transact with your cryptocurrencies.
Types of Crypto Wallets
There are two main types of crypto wallets: hot and cold. Hot wallets are connected to the internet. These include:
- Online wallets. These wallets connect to other websites/online services. For example, many crypto exchanges offer online wallets through their platforms.
- Mobile wallets. Mobile wallets can be downloaded to your mobile device. You then store your keys on the mobile app.
- Desktop wallets. With a desktop wallet, you download a program to your computer, which you then use to store your keys.
Cold wallets are wallets that are not connected to the internet. For example, you could buy a USB key that stores your keys. You could also print off your private keys on a piece of paper.
In addition, crypto wallets can either be custodial or noncustodial. A custodial wallet is one where a third party controls and manages the wallet, including security, on your behalf. An online wallet from a crypto exchange would be custodial.
A noncustodial wallet is one where the cryptocurrency owner manages the wallet. A USB hard drive or a paper wallet would be noncustodial. You are responsible for storing and protecting your keys on a noncustodial wallet.
What Is a Hot Wallet?
“Hot” wallets can be desktop, mobile or web-based applications, requiring an internet connection. The connectivity to the web makes these types of wallets more accessible. But it comes with a trade-off: security. Online wallets are more susceptible to hacks.
What Is a Cold Wallet?
Generally, A more secure type of wallet is a “cold” wallet. These hardware wallets come in several shapes and sizes, and they can be a USB stick that connects to the web or a device that scans a QR code, linking to a software application.
Hardware wallets help keep your private keys safe from hackers who would need to steal the physical wallet to gain access and usually involve a PIN as an extra layer of security.
You can typically purchase a hardware wallet for between $50 and $150, although there are some higher-priced options, too.
Why Do You Need a Crypto Wallet?
Cryptocurrency exists as nothing more than a string of code on a larger blockchain. When you purchase cryptocurrency, such as Bitcoin or Ethereum, your proof of ownership is based on a public key and a private key.
The public key is like your bank account number: It tells you where your crypto is, but it doesn’t provide access to it. The private key identifies you as the “true owner.”
If you lose the private key, you could lose access to your crypto. Likewise, any person who gets ahold of your private keys has full access to your crypto.
There’s a popular expression in the crypto world, “Not your keys, not your coins.” If you don’t control your keys, you don’t have full access to your crypto assets.
– Bakhrom Saydulloev, product lead at global payments infrastructure platform Mercuryo
How To Choose a Crypto Wallet
If you’re buying crypto, you’ll want to explore the crypto wallet best suited for your needs. You might be interested in holding a whole portfolio of different coins and tokens in one wallet. Or maybe you’re just looking for a crypto wallet that supports only a few big cryptos with myriad features.
Overall, it’s important to find a crypto wallet with:
- A strong, stable history
- A high level of security
– Petr Kozyakov, co-founder and CEO of global payments infrastructure platform Mercuryo
How To Get a Crypto Wallet
How to get a crypto wallet depends on what kind you want. If you’d like an online, mobile or desktop wallet, the steps are fairly straightforward.
- Download the necessary software from the crypto wallet company.
- Set up your account.
- Use the digital address or QR code provided by the wallet to start accepting asset transfers. Some wallets can also integrate directly with major crypto exchanges.
- Follow the wallet’s process for transferring over your assets. The crypto private keys will then be stored in your wallet versus the exchange.
You follow a similar process with a cold, offline wallet.
- Buy the physical hardware wallet.
- Download the necessary program to set up your wallet as indicated by your hardware.
- Use the program to transfer your cryptocurrency keys to the hardware storage device.
- Alternatively, there are paper wallet generator websites online. You can use those to create and print off a paper crypto wallet with your keys.
How To Set Up a Crypto Wallet
Just like there are many ways to store your cash, there are many ways to stash your crypto.
Opening a crypto wallet will vary by the type chosen. If you’re using an exchange wallet, for example, you’ll pick a platform that you trust and then create an account. Generally, personal information and a two-step verification process is required.
For a hardware wallet, you’ll need to purchase the hardware first. You’ll typically need to install software to set up the wallet, too.
Crypto Wallet FAQs
What is a fiat wallet?
A fiat wallet stores currencies from countries, like U.S. dollars or euros, rather than cryptocurrencies. Fiat wallets use a setup similar to crypto wallets, including connecting to crypto exchanges.
If you want to make a crypto trade, you can transfer money from a fiat wallet much more quickly than a bank transfer, which could take days. Fiat wallets allow you to hold onto regular currency, so it’s ready immediately for future crypto trades.
Which wallet is best for crypto?
There are a number of excellent crypto wallets, many of which we have reviewed above. The right fit depends on your goals, such as whether you want a hot wallet that connects directly to the internet or if you would prefer a cold wallet to store your keys on an offline hardware device.
Are crypto wallets safe?
Crypto wallets are safe if you follow the proper practices and use a company with good security. In general, moving cryptocurrencies off an exchange to a wallet helps protect your digital assets. You add an extra layer of protection from a cyberattack against an exchange.
If you use a hot wallet connected to the internet, it could still be exposed to hackers. That’s why it’s essential to use a company with a strong reputation for security. Cold wallets are safe from hacks. However, you need to protect the device and not lose it. Otherwise, you risk losing your cryptocurrencies.
What happens if a crypto wallet company goes out of business?
If you store your cryptocurrencies on a noncustodial cold wallet, you are protected if the crypto wallet company goes bankrupt. You still possess the keys and can transfer your cryptocurrencies to another wallet.
Using a hot wallet managed by a third-party custodian could be a problem if the company goes out of business. You would file a claim against the company, like all other creditors and investors. However, there is no guarantee the company would have enough to pay the total value of your crypto.
For this reason, it’s safest to keep your long-term investments in a cold wallet, even if a hot wallet is cheaper and more convenient.
