A hardware wallet is a physical device that stores your private keys offline, meaning it is separated from the internet. Such devices are suitable if you want to store larger amounts of BTC, ETH or other tokens and coins . Advantages: Keys remain offline and are thereby better protected from theft. Support for many different cryptocurrencies. Safe even when connected to a compromised device (e.g. an infected computer). Limitations: Acquisition costs are often higher. Somewhat less practical for daily access or frequent trading . Loss or damage of the device requires well secured backups of the seed phrase .

A paper wallet is a physical copy of your private key or your seed phrase — usually as a printout or handwritten note, sometimes complemented by QR codes. Since there is no connection to the internet, this method counts among the safest forms of offline storage. It is particularly suited if you want to hold cryptocurrencies like Bitcoin over a longer time without regular access. However, a paper wallet also brings risks. Paper can be easily damaged, stolen or lost . Also missing is any digital protection mechanism such as PIN or two‑factor authentication. Anyone who opts for this variant should pay attention to physical security and use a trusted offline environment.

With a brain wallet, you store or memorise your seed phrase or private key exclusively in your memory, without any written or digital backup. This method does offer protection against physical theft or hardware loss, but it carries a significant risk: If you forget the phrase, your cryptocurrencies are lost permanently! Additionally, if the passphrase is weak or easily guessable there’s a risk of brute‑force attacks. These are automated attempts to gain access by systematically trying countless password combinations. A brain wallet is therefore only useful if you use a complex, unique word combination and can memorise it absolutely reliably. In practice, this form of storage is therefore unsuitable for most people.

Hot wallets are digital wallets with continuous online access. These include, for example, desktop wallets , mobile wallets or web wallets on crypto exchanges. They are particularly suitable for users who trade frequently or regularly access their coins and tokens, for instance via an app like Bitpanda . Because of the constant online connection there is a higher risk of hacking, phishing or malware . This means you should adopt additional security measures: Use strong passwords, secure your device, enable two‑factor authentication and keep your wallet software always up to date. For larger amounts of Bitcoin, Ethereum or other tokens and coins it can therefore also make sense to store them offline. Hot wallets are often suitable for smaller amounts or short‑term access.

Cold wallets are wallets that are not connected to the internet. That gives them a particularly high level of security, ideal for long‑term and safe storage of larger amounts of cryptocurrencies like Bitcoin or Ethereum. Typical forms are hardware wallets, paper wallets or even specially prepared offline computers. Because cold wallets have no direct network access they are effectively protected from online attacks. However their handling is somewhat less flexible. If you trade regularly or want flexible access to your cryptocurrencies you should not rely solely on offline storage. Cold storage is especially a suitable complement to a hot wallet . Particularly for users who consciously self‑custody their digital assets and aim to minimise the risk of theft or loss.

A hidden wallet, also called a “plausible deniability wallet”, is a hidden portion within an existing wallet structure. This method is often supported by advanced wallet software as in some hardware wallets. The goal is to create an additional place to store funds that is accessible only via an alternate passphrase and not immediately visible. Advantages: Offers an extra degree of protection in situations of physical coercion or extortion. Can serve as a hidden vault for particularly sensitive assets. Supports deliberate separation of assets. Limitations: More technically complex to set up. Requires great discipline in handling the seed phrase and alternative passphrases. Only useful if the device or wallet software supports hidden functions.

11/20/2025

17 min read

How can I keep my cryptocurrencies safe?

Blockchain technology offers a high level of security against data manipulation, but the responsibility for your cryptocurrencies lies with you. What matters above all is your device, reliable service providers and your behaviour online. We’ll show you how and where you can store Bitcoins (BTC) as well as other crypto coins and tokens as safely as possible — with simple steps like software updates, strong passwords and secure backups. This way you protect your wallet from theft, loss and unauthorised access.

Storage: If you want to keep your crypto coins and tokens safe, you can weigh up hot and cold wallets and choose the wallet type that fits your needs.
Security measures: Regular software updates, strong passwords and shielding your devices are crucial for the security of your wallet.
Recovery: You should store the seed phrase offline, in multiple copies and in separate places so you can restore access to your cryptocurrencies in an emergency.
Risk reduction: Avoid central weak points by spreading your holdings and not keeping everything in one wallet or on one platform.

Where can I safely store crypto coins and tokens?

If, for instance, you invest in Bitcoin (BTC) or Ethereum (ETH), you should early on consider where you can safely store your cryptocurrencies.

Depending on how often you want to access your coins and how much security you need, different methods come into play: from a secure device for cold storage to a mobile app for quick access. You should understand how your keys are stored, how you can recover them in an emergency and which risks are associated with each type of custody.

A hardware wallet is a physical device that stores your private keys offline, meaning it is separated from the internet. Such devices are suitable if you want to store larger amounts of BTC, ETH or other tokens and coins.
Advantages:
Keys remain offline and are thereby better protected from theft.
Support for many different cryptocurrencies.
Safe even when connected to a compromised device (e.g. an infected computer).
Limitations:
Acquisition costs are often higher.
Somewhat less practical for daily access or frequent trading.
Loss or damage of the device requires well secured backups of the seed phrase.
A paper wallet is a physical copy of your private key or your seed phrase — usually as a printout or handwritten note, sometimes complemented by QR codes. Since there is no connection to the internet, this method counts among the safest forms of offline storage. It is particularly suited if you want to hold cryptocurrencies like Bitcoin over a longer time without regular access.
However, a paper wallet also brings risks. Paper can be easily damaged, stolen or lost. Also missing is any digital protection mechanism such as PIN or two‑factor authentication. Anyone who opts for this variant should pay attention to physical security and use a trusted offline environment.
With a brain wallet, you store or memorise your seed phrase or private key exclusively in your memory, without any written or digital backup. This method does offer protection against physical theft or hardware loss, but it carries a significant risk: If you forget the phrase, your cryptocurrencies are lost permanently!
Additionally, if the passphrase is weak or easily guessable there’s a risk of brute‑force attacks. These are automated attempts to gain access by systematically trying countless password combinations. A brain wallet is therefore only useful if you use a complex, unique word combination and can memorise it absolutely reliably. In practice, this form of storage is therefore unsuitable for most people.
Hot wallets are digital wallets with continuous online access. These include, for example, desktop wallets, mobile wallets or web wallets on crypto exchanges. They are particularly suitable for users who trade frequently or regularly access their coins and tokens, for instance via an app like Bitpanda.
Because of the constant online connection there is a higher risk of hacking, phishing or malware. This means you should adopt additional security measures: Use strong passwords, secure your device, enable two‑factor authentication and keep your wallet software always up to date. For larger amounts of Bitcoin, Ethereum or other tokens and coins it can therefore also make sense to store them offline. Hot wallets are often suitable for smaller amounts or short‑term access.
Cold wallets are wallets that are not connected to the internet. That gives them a particularly high level of security, ideal for long‑term and safe storage of larger amounts of cryptocurrencies like Bitcoin or Ethereum. Typical forms are hardware wallets, paper wallets or even specially prepared offline computers.
Because cold wallets have no direct network access they are effectively protected from online attacks. However their handling is somewhat less flexible. If you trade regularly or want flexible access to your cryptocurrencies you should not rely solely on offline storage.
Cold storage is especially a suitable complement to a hot wallet. Particularly for users who consciously self‑custody their digital assets and aim to minimise the risk of theft or loss.
A hidden wallet, also called a “plausible deniability wallet”, is a hidden portion within an existing wallet structure. This method is often supported by advanced wallet software as in some hardware wallets. The goal is to create an additional place to store funds that is accessible only via an alternate passphrase and not immediately visible.
Advantages:
Offers an extra degree of protection in situations of physical coercion or extortion.
Can serve as a hidden vault for particularly sensitive assets.
Supports deliberate separation of assets.
Limitations:
More technically complex to set up.
Requires great discipline in handling the seed phrase and alternative passphrases.
Only useful if the device or wallet software supports hidden functions.

In principle hardware wallets count among the safest methods to store your crypto assets. They store your keys offline and reliably protect them from online threats. Anyone who regularly accesses their cryptocurrencies or trades actively can use software wallets or mobile wallets like the Bitpanda app.

A combination of a hot wallet (online) for everyday use and a cold wallet (offline) for long‑term custody of coins like BTC or ETH is recommended. Keep control over your private keys and secure your wallet with backups.

Protecting Bitcoins and other cryptocurrencies: how to secure your wallet

The correct handling of your wallet, whether online or offline, protects not only against theft but also against unintentional loss through technical errors or incorrect use.

However, the biggest security risks don’t stem from the blockchain itself but from the devices and platforms you use in everyday life. Specifically, from smartphones, computers or the websites of crypto exchanges. Wherever you access your wallet, store your keys, or keep Bitcoins and other coins and tokens, vulnerabilities can occasionally arise.

Actively protect your wallet and your cryptocurrencies. The following tips help you minimise common risks and reliably secure access to your digital assets.

Safe use of public networks

Open Wi‑Fi networks are convenient but carry many risks. Anyone who connects without protection potentially exposes sensitive data like private keys or seed phrases to attacks, especially when wallets are stored directly on the device.

Avoid accessing your wallet via public networks wherever possible. If it can’t be avoided, use a VPN and ensure your wallet is encrypted. Keep larger amounts offline and never store all keys on a single device. In general, a VPN can significantly reduce the risk of attacks in public Wi‑Fi.

Important tips:

No wallet access via public email accounts.
Don’t leave devices unattended or lend them.
Remove wallets before sending devices for repair.

Update software regularly

Outdated software is among the most common security gaps if you want to store crypto safely. If you don’t keep your devices and wallets up to date, you expose yourself to avoidable risks. Updates close known vulnerabilities – that’s why they should be a regular part of your routine.

Important tips:

Schedule fixed times to update operating systems, wallet software and security applications.
Avoid automatic updates for sensitive applications like crypto apps.
Wait a few days after release, read user reviews and check whether everything is working properly.

Use an encrypted password manager

As an internet user, you’ve likely already created dozens of accounts across various platforms — and you might be using the same password for all of them. That also means if someone hacks your password, that person could access your emails, online shop accounts, music streaming services and every other online service you use.

Fortunately, there’s a simple solution to this problem: create a separate, and above all secure, password for each account. Trouble remembering them all? You can store your passwords in an encrypted password manager like LastPass or Dashlane, and only need to remember the master password.

However, keep in mind that password managers, especially those with cloud connectivity, can themselves be targets of cyberattacks. An alternative is KeePass, a password manager that stores passwords locally on your device rather than in the cloud. This local storage offers an extra layer of security, as it isolates your sensitive information from potential online threats.

Use two‑factor authentication (2FA)

Activate two‑factor authentication (2FA) wherever it’s supported. With 2FA, you can provide additional protection for your accounts and assets against hacker attacks. This form of authentication is a cost‑effective way to enhance the security of your accounts or any services you use to manage your cryptocurrencies. It’s also easy to install and use.

To activate 2FA for your accounts and services, download an authenticator app to your smartphone. From then on, every login will require you to enter a code in addition to your password, which you might receive on your smartphone via SMS, for example.

Trade cryptocurrencies via a secure platform

Before you start trading cryptocurrencies, you should compare platforms carefully. A secure and regulated platform protects not just your transactions but also helps you store your crypto safely, for example through integrated security features or transparent recovery options.

When choosing, look for the following criteria:

The platform is regulated and complies with applicable laws.
There’s an experienced team behind it.
Modern security measures like two‑factor authentication (2FA) are available.
Support for fiat currencies, cryptocurrencies and common payment methods like SEPA or PayPal.
The platform is user‑friendly and offers reliable support.

Bitpanda is a European platform based in Vienna, offering fast and secure access to digital assets for both beginners and experienced users. In addition to cryptocurrencies like Bitcoin and Ethereum, you can also invest in stocks, ETFs and precious metals – all via a central, user‑friendly interface.

To keep your assets safe, Bitpanda uses two-factor authentication, SSL-encrypted data transmission, cold storage for most cryptocurrency holdings and session management with login confirmations via email.

Recovery options

If you ever lose access to your wallet, you can recover your cryptocurrencies using your seed phrase – also known as a recovery phrase. It's a specific sequence of words that acts as your backup key. To stay protected, store it offline in several secure places and keep your private keys locked away. Only those with the phrase can access your coins and tokens.

Make sure you understand exactly how recovery works for your specific wallet, as the steps vary depending on the provider. Read the instructions carefully and regularly test your recovery methods to ensure everything works in an emergency. If you securely store your seed phrase and private keys and have an emergency plan, you’re significantly better protected.

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How can I store my cryptocurrencies even more securely?

To store your crypto coins and tokens even more securely, you can rely on advanced security measures. Alongside using multi-signature wallets, which require multiple approvals for transactions, you should regularly back up your hardware wallets. These measures help ensure your digital assets are protected even in case of physical damage or loss.

Multi-signature wallets

Multi-signature wallets increase the security of your cryptocurrencies by making transactions dependent on multiple approvals. Instead of a single person having sole control of a wallet, multi-signature wallets require the consent of several parties to carry out transactions. This type of wallet is particularly useful for companies or groups that want to manage their crypto assets and holdings jointly. By distributing control, multi-signature wallets minimise the risk of theft or loss. Hackers would now need to compromise multiple keys to access the assets.

Hardware wallet backups

Backups of your hardware wallets are a fundamental security measure to ensure you retain access to your cryptocurrencies, even if the device is lost, damaged or stolen. A backup, usually in the form of a seed phrase, enables you to restore access to your cryptocurrencies. Store the seed phrase in a safe place, preferably separately from your hardware wallet. This way you protect yourself against both physical and digital threats.

Physical security measures for wallets

Alongside digital security measures, you should also consider physical protections for your wallets. This can include storing your hardware wallet securely in a safe or other location to protect it from theft or damage. For added protection, waterproof and fireproof containers can help guard your devices and backup information from environmental damage.

Safely storing cryptocurrency: store online or offline?

Whether you store your cryptocurrencies such as Bitcoin online or offline depends on your security needs and access requirements. Online storage, or “hot storage”, offers convenience and quick access, but is more vulnerable to online threats. Offline storage, “or cold storage”, offers the highest level of protection against digital attacks, but makes accessing your assets less convenient.

From an IT security perspective, every single point of failure is bad. A single point of failure (SPOF) is a system component whose failure can prevent the entire system from working. That means you should not just create one backup of your data, but always have multiple backups (e.g. on various USB sticks), multiple wallets and multiple passwords.

Reduce the use of services that are constantly connected to the internet or your computer. Trading platforms, for example, are primarily designed for trading and are not intended to securely store large amounts of cryptocurrencies long term. If you want to trade on an exchange, you typically still need to keep a certain balance on the platform to carry out transactions and provide liquidity.

What can happen if you don’t store your cryptocurrencies securely

Those who don’t store their cryptocurrencies securely risk losing their digital assets – whether through hacks, malware or fraudulent projects. To avoid common scams and phishing attacks, be alert to emails and messages that sound too good to be true. Also be cautious if they prompt you to enter personal information. The following examples illustrate the importance of storing crypto coins and tokens securely and staying alert to potential threats.

Mt. Gox: The biggest loss in Bitcoin history

In 2014, the then largest Bitcoin exchange Mt. Gox was hacked. Around 850,000 bitcoins disappeared – a loss that still resonates today. About 200,000 BTC were later recovered, but the rest remains missing.

Slope Wallet: Private keys compromised

In August 2022, over 9,000 wallets on the Solana blockchain were emptied. The cause was a security vulnerability in the Slope mobile wallet app, which unintentionally transmitted private keys to external services. The damage amounted to around 4.1 million US dollars.

Cryptojacking: Covert mining on your device

With cryptojacking, attackers secretly use your computing power to mine cryptocurrencies. A well-known example is the Coinhive script, which several websites embedded in 2017 to mine Monero – often without users’ knowledge.

ICO fraud: empty promises and exit scams

Many Initial Coin Offerings (ICOs) lure investors with unrealistic return promises and then disappear with the raised funds. A well-known example is BitConnect, which was exposed in 2018 as a Ponzi scheme. To protect yourself, always check the project’s whitepaper, the team and its regulation before investing – this reduces the risk of a crypto scam.

Conclusion: Crypto wallets – where you can safely store your Bitcoin

Where you store your cryptocurrencies determines how secure they are and how you can access them. There are many ways to protect your digital assets effectively – from choosing the right storage location to conducting regular security checks. A combination of a cold and a hot wallet, for example, allows for both secure storage and easy trading of your cryptos.

Don’t forget that the world of cryptocurrencies is constantly evolving. Keep yourself informed about the latest security trends and technologies. With the right preparation and the necessary knowledge, you can ensure that your crypto wallets are truly a well-protected place for your bitcoins and other cryptocurrencies.

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Frequently asked questions about storing crypto securely

We answer the most common questions about security and crypto wallets to give you a comprehensive understanding.

How can I store my bitcoins securely?

For good security, you can use a hardware wallet – that is, a cold wallet from reliable providers. This stores your private keys offline and thus protects them effectively from online attacks. If you access your coins and tokens more frequently, a hot wallet might also be useful – for example, a mobile or desktop version. Also consider additional protective measures such as two-factor authentication and regular updates. Regardless of the wallet type, you should store your seed phrase securely and regularly check your backups.

What role do passphrases play in securing bitcoin and other crypto?

A passphrase adds an extra layer of security to your seed phrase. It’s often referred to as the “25th word”, although it can consist of any characters or multiple words. Even if someone gains access to your seed phrase, the passphrase still protects access to your wallet. Not every wallet supports this function, but it is often available on hardware wallets.

Important: If you lose the passphrase, the wallet cannot be recovered – even if the seed phrase is still available.

Can I recover a private key?

You cannot recover the private key itself, but if you've securely stored your seed phrase, the private key can always be regenerated from it. This is why it’s essential to keep your seed phrase offline and protected. If both are lost, access to your cryptocurrencies is lost permanently.

Should I store bitcoin myself or use a crypto exchange?

Storing bitcoin independently offers more control and security, but it does mean you’re responsible for implementing all the security measures. Secure storage via a crypto exchange can be more convenient, but it carries risks as you’re handing control of your private keys to the exchange. Weigh the pros and cons and decide based on your need for security and comfort level.

What happens if I lose my wallet?

If you lose your wallet but have backups of your private keys or seed phrases, you can restore your cryptocurrencies. Without a backup, however, you lose access to your assets. Store your backup information in a secure location.

How can I store the seed phrase securely?

Keep your seed phrase in a safe and private location, preferably offline, such as in a safe or another protected place. Write it down on paper and avoid digital copies that hackers could obtain. After all, the seed phrase is the key to recovering your wallet.

Want to expand your knowledge about cryptocurrencies and wallets? In the Bitpanda Academy, you’ll find numerous articles to help you better understand the technical foundations, applications and security aspects. Discover more topics now on Ethereum, blockchain and the secure handling of digital assets.