How should Bitcoin be stored?
Bitcoin can be kept on an exchange (custodial) or in a wallet you control (non-custodial). Self-custody can use a hot wallet for everyday access or a cold wallet kept offline for amounts you don't touch often.
The two big choices
- Custodial: a platform holds the keys for you. Convenient, and you rely on that platform's security.
- Non-custodial: you hold the keys. Full control, full responsibility — including safeguarding your seed phrase.
- Hot wallet: connected to the internet for frequent use; more convenient, more exposed.
- Cold wallet: kept offline; used for storing holdings that don't move often.
The seed phrase
A non-custodial wallet gives you a seed phrase — a list of words that can restore it. It is the master key to your funds. It is never typed into a website, never shared, and never stored where others (or malware) could reach it.
Storage is where Bitcoin is most often won or lost. The right setup depends on how much you hold and how often you use it — and getting the seed-phrase habit right prevents the most common catastrophic loss.
Treat a hot wallet like the cash in your pocket and a cold wallet like a safe at home. You wouldn't carry everything in your pocket, and you wouldn't run to the safe for a coffee.
- Anyone who obtains your seed phrase can take your funds; there is no recovery afterward.
- Lost keys with no backup mean permanently lost funds.
- 'Support agents' asking for your seed phrase are always a scam.
See custody habits in the Wallet Simulator
Related questions
Last reviewed 2026-06-25. This topic can change over time; always confirm current specifics from primary sources.