Keys, Custody, and Calm: How to Actually Store Your Crypto in 2025
A practical, risk-based framework for mixing cold, hot, and exchange balances—without losing sleep (or your coins).
This blog post was inspired by a good friend who came to me with a very challenging question. He was advised by many of his friends to put his Crypto into cold storage and after thinking about it he did so. However, reality set in that he’s 100% in control of his money and that was both scary and freeing. After having his mother’s Crypto flagged by Coinbase as suspicious he realized just how much power the Crypto exchanges have over your money. What is the best way to be in control of your financial future in Crypto?
TL;DR (the 90-second answer)
Yes, cold storage is safer for long-term funds because it removes exchange and online attack surface.
No, you probably shouldn’t be 100% cold. Keep a small hot balance for spending and a minimal exchange balance for trading/on-ramps.
Starting mix (personal investors): 70–95% cold, 5–20% hot (self-custody software/hardware used “hot”), 0–10% exchange. Adjust for how often you trade and spend.
Hardware vs software: Use hardware for savings and long-term holdings; software/mobile for small, frequent transactions.
If “being 100% in control” scares you: use multisig or collaborative custody so one mistake can’t nuke everything.
First principles: what are you securing against?
Your wallet mix should defend against five risks, not just “hacks”:
Counterparty risk (exchange/borrower goes down or freezes withdrawals).
Technical risk (malware, SIM-swap, browser extension hijacks).
Operational risk (you lose the seed; heirs can’t recover funds).
Legal/regulatory risk (holds, KYC/AML flags slowing withdrawals).
Liquidity risk (you can’t move fast enough when markets or life events demand it).
Cold storage crushes #1 and #2, but can increase #3 if you don’t plan recovery. Exchanges help #5, but increase #1 and #4. The right answer is a portfolio of custody, not a single box.
Wallet types—what they’re good for
Custodial exchange accounts (CEX): Best for fiat on/off-ramps and active trading. Risks: counterparty, legal holds, rehypothecation, platform hacks. Never store life savings here.
Hot software wallets (mobile/desktop/browser): Keys live on an internet-connected device. Best for daily spending and DeFi dabbling. Risks: malware, phishing, SIM swaps.
Hardware wallets (signing devices): Keys stay in a secure chip; transactions are signed on the device. Best for long-term savings. Risk: seed loss, supply-chain if you’re careless.
Air-gapped “cold” setups: Signing is offline (QR or microSD). Max safety, less convenience.
Multisig / MPC / smart-contract wallets: Require multiple keys or parties to approve a spend. Best for larger balances, businesses, or folks who fear single points of failure.
Paper wallets: Don’t. They’re easy to mess up and fragile.
A simple allocation framework (pick your profile)
Use these as starting points, then tune:
1) Long-term HODLer (rarely trades)
Cold storage: 90–98% (hardware or 2-of-3 multisig).
Hot self-custody: 2–8% for spending/Lightning/DeFi experiments.
Exchange: 0–2% (only when actively buying/selling, then withdraw).
2) Active swing trader / frequent rebalancer
Exchange: 30–60% (tied to strategy and margin needs; keep withdrawal allowlists and hardware-key 2FA).
Cold storage: 30–50% (your “do not touch” core).
Hot self-custody: 10–20% for quick on-chain moves.
3) Small business / family treasury
Cold multisig: 70–90% with written policy (e.g., 2-of-3 or 3-of-5; two hardware devices + one trusted cosigner who cannot spend alone).
Hot self-custody: 5–15% for operating expenses.
Exchange: ≤10% for payroll ramps or vendor settlements.
Rule of thumb: Keep two weeks of expected spending in a hot wallet, one month of expected trading on exchange, and everything else in cold.
Should the average person be 100% in control?
Self-custody is freedom with responsibility. If you can follow a checklist (below), it’s within reach. If that still feels heavy, collaborative custody (multisig with a non-custodial service or trusted professional) gives you redundancy without ceding unilateral control.
Never outsource all control to a single exchange and never centralize all control in a single seed you might lose. Avoid single points of failure.
Hardware vs software wallets (when to use which)
Use hardware for your “savings account.” Verify addresses on the device screen, enable a passphrase if supported (adds a decoy layer), and store backups on metal seed plates in two locations.
Use software/mobile for everyday money. Prefer wallets that support biometric + device secure enclave, transaction labeling, and address books. Keep balances small.
Browser extension wallets are convenient but higher risk—treat them like cash in your pocket.
Exchange best practices (if you must keep funds there)
Turn on hardware-key 2FA (FIDO/U2F); disable SMS 2FA.
Set withdrawal whitelists and a 24–48h cooldown on new addresses.
Prefer platforms with regular proof-of-reserves and clear segregation of customer assets.
Don’t chase yield you don’t understand (counterparty risk often hides in “earn” products).
Withdraw profits on a cadence (e.g., weekly) to cold.
Multisig & collaborative custody—peace of mind without giving up control
For larger balances or shared ownership:
A 2-of-3 scheme (you + spouse + independent co-signer) prevents a single lost device from bricking funds and prevents a single party from running off with them.
Keep devices from different manufacturers to avoid correlated firmware risks.
Document a break-glass process for heirs (who to contact, which keys they hold, how to assemble signatures).
Multisig (multi-signature) wallets are one of Bitcoin’s most powerful security tools. Instead of one key controlling your entire stack, multisig requires multiple keys to approve a transaction — drastically reducing single points of failure. Whether you’re safeguarding personal savings, building family inheritance plans, or managing corporate treasuries, the right multisig partner matters.
Here are some of the most trusted providers in 2025:
Unchained Capital – Popular for 2-of-3 collaborative custody vaults. You hold 2 keys, they hold 1, giving you control with added recovery options and white-glove support.
Casa – Known for smooth UX and high-end multisig setups (3- or 5-key). Perfect for high-net-worth individuals who want redundancy and concierge-style service.
BitGo – Institutional heavyweight with robust multisig custody, regulatory compliance, and API integrations. Overkill for individuals but essential for companies and funds.
Bitkey (by Block, Inc.) – A newcomer bringing user-friendly 2-of-3 multisig with backup/recovery built in. Great for those who want simplicity without giving up self-custody.
Nunchuk – A rising star, offering flexible group multisig wallets, inheritance planning, and strong hardware support. Tailored for collaborative use.
Electrum & Armory – Open-source OGs. If you want full control and don’t mind technical setups, these give maximum sovereignty with zero reliance on third-parties.
The trade-off always comes down to convenience vs sovereignty. Collaborative custody (Unchained, Casa, Bitkey) provides peace of mind if you lose a key, while DIY (Electrum, Armory) is ultimate sovereignty but requires discipline. For institutions, BitGo remains the gold standard.
In short: multisig is no longer just for hardcore cypherpunks — it’s becoming mainstream security infrastructure for anyone serious about Bitcoin.
In addition to those mentioned above consider Onramp:
🧱 Onramp (Multi-Institution Custody)
What it is: Onramp offers a 2-of-3 multi-institution custody model. Three independent institutions each hold a key (examples include BitGo Trust, Kingdom Trust/Tetra Trust, and Coincover); any movement of funds requires approvals from two of the three. No single party can unilaterally move coins. (Onramp Bitcoin)
How it works (high level): Keys are generated and stored offline by each institution; transactions require multi-party authorization and (for certain account types) recorded identity/verification checks. Onramp positions this as eliminating single points of failure while offloading ops and key-handling from the client. (Onramp Bitcoin)
Who it’s for: HNWIs, family offices, and institutions that want institutional-grade governance, auditability, and operational support—without a single custodian controlling everything. (Onramp Bitcoin)
Pros
Distributed risk: No single custodian/key holder can cause loss or seize funds. (Onramp Bitcoin)
Operational lift: Clients avoid seed-phrase/hardware management while retaining control via a governed process. (Onramp Bitcoin)
Institutional pedigree & partners: BitGo/Coincover/Trust co-signers; product line includes trusts, IRAs, and inheritance tooling. (CoinDesk)
Trade-offs / things to know
Not DIY self-custody: Control is enforced through multi-party approvals rather than you personally holding a quorum of keys (contrast with Unchained/Casa where you typically hold 2+ keys). (Onramp Bitcoin)
Process & governance: Movements may involve verification steps (slower than pure self-custody but adds compliance and security). (Onramp Bitcoin)
TL;DR comparison:
If Unchained/Casa = “you hold most keys, provider holds one for recovery/support,” then Onramp = “three separate institutions each hold a key, and you control the process that authorizes movement.” It’s designed for larger treasuries and families that value distributed trust, audit trails, and minimized single-counterparty risk. (Onramp Bitcoin)
The 12-step setup (weekend project)
Define your mix (use the profile above).
Buy two hardware wallets from official sources; update firmware.
Generate seeds offline; write 12/24 words neatly; never photograph.
Add a passphrase (if supported) and record it separately from the seed.
Back up to metal; store in two secure, geographically separate places.
Create a hot wallet on your phone for small spends.
Test restores: wipe and restore one device from the seed to prove it works.
Whitelist withdrawal addresses on your exchange; enable hardware 2FA.
Send a small test transaction from exchange → cold; verify address on-device.
Label transactions and keep a simple ledger (helps with taxes and heirs).
Write an inheritance letter: what you own, where the backups are, who can co-sign.
Quarterly drill: update firmware, re-read your recovery plan, send a $5 test spend.
Common mistakes to skip (you’re smarter than these)
Taking a seed photo or storing it in cloud notes/email.
Keeping all funds on one exchange or all funds in one seed.
Ignoring SIM-swap risk (port-out lock with your carrier; avoid SMS 2FA).
Blind-signing transactions without verifying the address on the device screen.
No plan for incapacity/inheritance.
A closing mental model: the Rule of Three
Three buckets: Cold (savings), Hot (spending), Exchange (liquidity).
Three controls: You (primary key), A second device (redundancy), A co-signer or policy (resilience).
Three checks per quarter: Firmware, backups, test transaction.
Dial the ratios to your life, but keep the structure. That’s how you get the best of both worlds: sovereignty without fragility, liquidity without regret.