Crypto wallets are an essential tool for buying, trading and selling cryptocurrencies. Traders need them to store crypto securely, as well as to protect and validate transaction information. Be they hardware or software, also called hot and cold storage, custom crypto wallets offer traders dedicated solutions compared to those from crypto exchanges.
Read on to learn about the different types of cryptocurrency wallets, how they work, and which one you should pick.
Our Top Picks for Best Crypto Wallets of 2021
Best Crypto Wallet Reviews
- Fast and easy to set up
- Greater security than other hot wallets
- Customizable transaction fees
- Wallets don’t suffer downtime thanks to server configurations
- Only supports Bitcoin trading
- Setup and interface not ideal for beginners
- No customer support via chat, email or phone
Why we chose it: We chose Electrum as the best Bitcoin wallet because of its extensive security features and high degree of customizability.
Founded in 2011, Electrum is one of the oldest and most well-known crypto wallets today. It’s also one of the few remaining crypto wallets that only deals in Bitcoin, a currency that Electrum is uniquely outfitted to support. The wallet hosts a variety of potent security features that others lack, and users can also adjust their fees depending on how long they’re willing to wait for a transaction to be completed: Pay more in fees, and your transaction will be executed faster.
One of the wallet’s greatest assets is that it uses a lightweight client. Light clients can be set up in a matter of minutes and take up less space than traditional wallet clients on your computer. By using simple payment verification (SPV) the wallet only downloads parts of the blockchain, which speeds up transactions without compromising security.
Other highlights include:
- Open-source wallet, meaning its code is available for scrutiny, which helps build trust and safety
- It also features custom transaction fees, which means users can adjust their fees depending on how long they’re willing to wait for a transaction to be completed, and several different types of user accounts
- Integration with hardware wallets (KeepKey, Ledger, Trezor) for cold storage
- Two-factor authentication and multi-signature support
- User-friendly interface that is easy to navigate
- Supports more than 500 cryptocurrency assets
- Multi-signature and 2-factor authentication support
- Backed by a reputable exchange that is able to recoup lost or stolen assets
- Similar security issues and weak points as other hot storage alternatives
- Only available on mobile and tablet devices (except for Chrome extension)
Why we chose it: We chose Coinbase as the best crypto wallet for beginners because it’s an intuitive and highly secure wallet that is backed by a well-known exchange.
Coinbase is an excellent wallet for beginners who have little to no experience with crypto. The app can connect to most major bank accounts and has an interface that is welcoming and easy to navigate, consisting of a simple three-tab layout and clearly identifiable functions. Coinbase can store non-fungible tokens (NFTs) and digital collectibles, and it supports over 500 crypto assets — the largest number among hot wallets on this list.
It’s important to make a distinction between Coinbase the exchange and the Coinbase wallet. The Coinbase wallet may be used without opening an account with one of the largest cryptocurrency exchanges. It’s also non-custodial, meaning its private key is stored in your device — not in Coinbase’s servers — so you don’t need to worry about your currencies being locked for any reason or exposed to a cyberattack on the website.
Other highlights include:
- Uses the Secure Enclave chip available in Android, iOS, iPad, and Mac devices to provide biometric authentication (e.g. FaceID, TouchID)
- Access to decentralized exchanges in-app, which can convert tokens without any intermediaries
- Optional cloud backups to protect your digital keys
- Compatible with popular cold storage solutions (Ledger, Trezor, KeepKey)
- HD spending accounts and Single Address saving accounts available
- In-app crypto exchange and educational material
- Offers offline transactions
- Inherently not as secure as hardware wallets
- It may be confusing for first-time users
- Only supports Bitcoin, Ether, and ERC-20 tokens
Why we chose it: We chose Mycelium as the best crypto wallet for mobile devices because of its strong focus on security and advanced transaction history information.
Mycelium is another well-established crypto wallet with a big focus on Bitcoin. Introduced to the market back in 2008, it has long been a mobile-only software wallet and continues to be one of the best options for Android and iOS users.
Mycelium’s security and transaction options are two of the wallet’s major highlights. The app is entirely reproducible, which means its code can be duplicated and compared to the original to find any potential security issues, and has several levels of pin protection. The wallet app features custom transaction fees with four recommended levels — low priority, normal, economic and priority — and several different types of user accounts.
Other highlights include:
- An advanced transaction history that includes information such as block height, which is a specific location in the blockchain; miner fees, which are paid to miners in the blockchain network; and inputs/outputs, which indicate addresses in a transaction
- Inter-wallet operability through the FIO network, which comprises leading crypto
- Wallets, exchanges and payment processors
- A watch-only mode, which lets users disable outgoing transactions while keeping track of their stocks and trades
- Supports a very large number of digital assets
- Built with special hardware designed to protect your private keys
- Bluetooth allows trading on the Ledger Live mobile app
- Built-in battery with 8 hours of battery life
- Much more expensive than other cold wallets
- The use of Bluetooth technology may be a privacy concern for some
- No touchscreen
Why we chose it: We chose Ledger Nano X as the best offline crypto wallet because of its number of supported currencies, high security standards and mobile trading capabilities.
Ledger is one of the most well-known brands of hardware wallets available today. Its initial popularity sparked with its first wallet, the Ledger Nano S, a feature-packed and highly secure cold wallet. The Ledger Nano X expands on the Nano S’ success by adding a built-in battery and features such as Bluetooth connectivity and greater asset management capabilities.
The Ledger Nano X is currently priced at $119, comes in a matte black finish and has a 128 x 64-pixel screen for cycling through apps. The wallet supports over 1,800 coins and tokens — the largest number on our list — and is able to manage up to 100 of them simultaneously through the apps on the device. Its Bluetooth Low Energy connectivity may be turned off at any point and enables the Nano X to be used with the Ledger Live app on Android or iOS devices to exchange crypto on the go.
Other highlights include:
- Ledger’s Secure Element chip, a specialized chip also used for high-end security solutions — such as credit cards and passports — that protects from various types of attacks
- In addition to buying and selling crypto, the Ledger Live app can be used to lend and stake crypto to generate revenue
- Supports over 145 crypto assets
- Compatible with Trezor One and Trezor T hardware wallets
- Allows users to buy Bitcoin with Apple Pay
- 24/7 customer support
- High transaction fees on the in-wallet crypto exchange
- Lack of native 2-factor authentication may bother some users
- No multi-signature support
Why we chose it: We chose Exodus as the best crypto wallet for desktops because of the speed of its transactions, ease of use, and the varied functionality of its client.
Exodus is one of the most visually appealing and intuitive wallets on the market yet. Originally a desktop-only wallet, Exodus now has apps for iOS and Android and is also compatible with Trezor wallets, a popular hardware wallet brand. Nonetheless, the desktop wallet application is still the wallet’s core offering and is updated every two weeks.
One of Exodus’ main draws is the number of currencies it supports. The wallet supports more than 145 cryptocurrency assets, a larger number than many other hot wallets. This includes established altcoins, such as Ether, Litecoin, Tether and Dash, as well as popular meme coins like Dogecoin and Shiba Inu.
Other highlights include:
- Customizable fees, though only for Bitcoin transactions as of September 2021
- A growing number of apps released to diversify the wallet’s functionality, including apps for live charts, crypto staking and crypto deposits
- Runs on a light client, meaning it uses SPV and doesn’t download complete blockchains in order to speed up transactions
Other crypto wallets we considered
- Choose between more affordable Trezor One and Trezor Model T
- Intuitive & convenient interface
- More expensive than other hardware wallets with similar functionality
- No support for iOS devices
Trezor is a well-known brand in the world of crypto, having released the very first hardware crypto wallets. Both of its current models feature excellent security measures and support numerous assets. It didn’t make our top list since the models offered by Ledger outmatched Trezor’s in regards to their build and the number of supported currencies. Nonetheless, we highly recommend Trezor for anyone who uses Exodus as their main crypto wallet due to its optimized integration with Trezor models.
- Reasonably priced hardware wallet
- Device display supports QR codes
- Supports a limited number of coins
- Heavier than similarly priced competitors
Another hardware wallet, the KeepKey is an excellent solution for those that are looking for an affordable hardware wallet, currently priced at $49.00. Its attractive display and interface are more beginner-friendly than those of the Trezor and Ledger wallets. The wallet also follows top-grade security standards. However, like the Trezor models, KeepKey was outclassed in certain areas when it came to the best offline wallet.
- Supports over 300 coins and tokens
- Supports credit card purchases and in-wallet exchanges and conversions
- No hardware wallet integration
- Not many coins are available for the atomic swap feature
Atomic Wallet is a hot storage wallet with plenty of things going for it. Users don’t need to open an account to use it, customer support is available 24/7, and it supports a considerable amount of assets. One highlight is its Atomic Swap feature, which uses a decentralized crypto exchange housed within the wallet itself to exchange currencies without third parties. It didn’t land on our list of the best cryptocurrency wallets because other wallets offered better versions of most of its features.
Crypto Wallets Guide
Blockchain technology has made digital currency transactions increasingly useful, practical and accessible. However, as the number of crypto users has gone up, so has the rate of cyber theft related to cryptocurrencies. That’s why having a highly secure crypto wallet is more important than ever, whether it’s digital or physical.
What is a crypto wallet?
Cryptocurrency wallets, or simply crypto wallets, are places where traders store the secure digital codes needed to interact with a blockchain. They don’t actively store your cryptocurrencies, despite what their name may lead you to believe.
Crypto wallets need to locate the crypto associated with your address in the blockchain, which is why they must interact with it. In fact, crypto wallets are less wallets than they are ledgers: They function as an owner’s identity and account on a blockchain network and provide access to transaction history.
How do crypto wallets work?
When someone sends bitcoin, ether, dogecoin or any other type of digital currency to your crypto wallet, you aren’t actually transferring any coins. What they’re doing is signing off ownership thereof to your wallet’s address, that is to say, they are confirming that the crypto on the blockchain no longer belongs to their address, but to yours. Two digital codes are necessary to do this: a public key and a private key.
A public key is a string of letters and numbers that are automatically generated by the crypto wallet provider. For example, a public key could look like this: B1fpARq39i7L822ywJ55xgV614.
A private key is another string of numbers and letters, but one that only the owner of the wallet should know.
Think of a crypto wallet as an email account. To receive an email, you need to give people your email address. This would be your public key in the case of crypto wallets, and you need to share it with others to be a part of any blockchain transaction. However, you would never give someone the password to access your email account. For crypto wallets, that password is the equivalent to your private key, which under no circumstances should be shared with another person.
By using these two keys, crypto wallet users can participate in transactions without compromising the integrity of the currency being traded or of the transaction itself. The public key assigned to your digital wallet must match your private key to authenticate any funds sent or received by it. Once both keys are verified, the balance in your crypto wallet will increase or decrease accordingly.
Types of crypto wallet
Crypto wallets can be broadly classified into two groups: hot wallets and cold wallets. The main difference between them is that the hot wallets are always connected to the internet while cold wallets are kept offline.
Hot wallets are digital tools whose connection to the internet cannot be severed. They are pieces of software that may be accessed from your phone or desktop computer to monitor your currencies and trade them. Some hot wallets may also be accessed from your browser, meaning you can use them on a wide variety of devices.
The greatest advantage of hot wallets is their convenience. Your public and private keys are stored and encrypted on your wallet’s respective app or website, so unless they’re limited to a specific device, you can access them anywhere with an online connection. This ease of access makes them ideal for those who trade more often and who are thinking of spending bitcoins.
Because hot wallets are always accessible online, they also face a greater risk of cyberattacks. Hackers can exploit hidden vulnerabilities in the software that supports your wallet or use malware to break into the system. This is particularly dangerous for wallets hosted by crypto exchanges, which are bigger targets overall for crypto thieves.
- Highly convenient, can be accessed from anywhere with an internet connection
- Easier to recover access in the event you lose the private key than cold wallets
- Less secure than cold wallets, vulnerable to a wider variety of attacks
- For custodial wallets, your keys are kept on the exchange’s servers
Cold wallets store your digital keys offline on a piece of hardware or sheet of paper. Hardware wallets usually come in the form of a USB drive which lets you buy, sell and trade crypto while it’s connected to a computer. With “paper” wallets, your keys may be accessible via print-out QR codes, written on a piece of paper, or engraved on some other material, such as metal.
Cold storage wallets are deliberately designed to be hard to hack. Unless the wallet owner falls for some sort of phishing attack, hackers have no way of obtaining the owner’s keys remotely. For something like a hardware wallet, a thief would first have to obtain the USB drive used to access your crypto and then somehow crack its password.
This high level of security may lend itself to mistakes on the part of wallet owners. If you lose your USB drive or sheet of paper and don’t have your private key backed up somewhere, you’ve effectively lost access to your crypto. Compared to hot wallets, which make it possible to regain access through a seed phrase, recovering access on a cold wallet is impossible in most cases due to the two-key security system.
- More secure than hot storage wallets due to offline storage
- Many hardware wallets are supported by hot storage wallets
- Transactions take longer on average
- Nearly impossible to recover currencies without a backup of your digital keys
What to look for in a crypto wallet
When looking for a crypto wallet, it’s very important to first ask yourself:
- How often do I trade? Will you be trading cryptocurrency daily or just occasionally? Hot wallets are better for active traders due to their speed and practicality. However, active traders may also benefit from a cold wallet by using it as a kind of savings account, keeping the bulk of their currencies there.
- What do I want to trade? Are you looking to buy and store Bitcoin or are you interested in different types of cryptocurrency, like altcoins and stablecoins? The crypto wallet you pick should support the currencies you wish to trade and will ideally accommodate any other coins you may want to trade in the future.
- How much am I willing to spend? Are you planning on accumulating large amounts of crypto at some point in the future? Hardware wallets are ideal for this sort of activity, but unlike hot wallets (which are mostly free), they require an upfront payment to own the wallet itself. Some hot wallets have higher crypto trading fees but offer faster transactions or greater functionality.
- What functionality do I need in a wallet? Do you plan on doing anything specific with crypto beyond simply trading it? For example, traders who want to passively make money with their crypto should look for wallets that allow for crypto lending, staking, and deposits.
Having asked yourself that, here are some general suggestions for what to look for in a crypto wallet:
- Supported currencies – The rule of thumb for supported currencies is “the more, the better.” Unless you’re interested in solely trading Bitcoin, we suggest you opt for a wallet that supports at least a few of the more popular altcoins.
- Accessible interface – An accessible, intuitive user interface is always welcome, regardless of whether you’re a crypto veteran or newbie. Look for wallets that don’t make you jump through hoops just to start basic trading.
- 24/7 customer support – Although more useful for newer traders, having customer support available throughout the day is always a plus. This is especially true for wallets that undergo frequent updates and may suffer from bugs or visual glitches.
- Hardware wallet compatibility – Anyone who is seriously thinking about getting into crypto should consider getting a hardware wallet. Even people who don’t trade frequently should consider a hardware wallet to safeguard their most important assets. Investors with a hot wallet that’s compatible with at least one brand of hardware wallet have an advantage, since they can default to the model(s) supported by their wallet and transfer their crypto back and forth as needed.
Investing in crypto prudently
Cryptocurrencies are a new and exciting financial asset. The idea of a decentralized currency independent of the banking industry is enticing for many. The wild price swings can be a thrill, and some coins themselves are simply amusing.
Consider the story of Dogecoin. A portmanteau of Bitcoin and Doge, the latter of which is a meme based on the image of a Shiba Inu dog, Dogecoin was created as a joke by Billy Markus and Jackson Palmer on December 6, 2013. The currency was a hit on Reddit, a popular social network forums site, and quickly generated a market value of $8 million. DOGE hit an all-time high on May 8 of this year, reaching a market capitalization of more than $90 billion after Elon Musk and Reddit users involved in the GameStop short squeeze turned their attention to it.
While entertaining, the fact remains that cryptocurrencies are unpredictable assets and should be traded with caution. It’s important to consider the following dangers when asking yourself “should I invest in cryptocurrencies?:”
Crypto is volatile. A cursory glance at the historical price of Bitcoin is enough to see massive peaks and depressions throughout its lifespan. Just recently, Bitcoin fell 53% in May of 2021 after having surpassed a value of $64,000 for a single coin in April. The same goes for any other major cryptocurrency. These dramatic changes are not normal compared to the pace at which mainstream assets move.
Crypto isn’t backed by anything. For most coins, there is no natural resource they track the value off of. They’re not backed by the government and don’t track the growth potential of enterprises the way stocks and bonds do. This increases crypto’s volatility as a whole. Cryptocurrencies are also speculative assets, which are riskier due to large fluctuations in price. Many active traders invest in them with the hope of making a big profit after their value dramatically increases in the near future — hopefully before a crash.
Crypto is unregulated. Governments and institutions around the world are still grappling with how to regulate cryptocurrencies, asking: Do we need specific legislation to regulate crypto assets? Who should regulate crypto? Should it be regulated at all? While this lack of regulation responds to the nature of crypto and its ethos of freedom, a lack of adequate regulation means consumers are not protected against many crypto crimes and scams. Ultimately, crypto must be studied and handled carefully, as its future remains uncertain.
Personal finance experts and advisors recommend investing no more than 5% of your portfolio in risky assets like crypto. Beginners should also refrain from riskier crypto trading practices, such as lending and staking currencies to generate revenue.
Crypto Wallet Glossary
- Blockchain: A blockchain is a type of ledger that records digital transactions and is duplicated across its entire network of systems. The shared nature of blockchain creates an immutable registry that protects users against fraud. Cryptocurrencies are traded on the blockchain.
- BTC: The currency code used to represent Bitcoin. Bitcoin was created by Satoshi Nakamoto as the first decentralized cryptocurrency. Read our article on what is Bitcoin to find out more.
- Foundation for Wallet Interoperability (FIO) Network: The FIO was established in the “pursuit of blockchain usability through the FIO Protocol.” The FIO protocol is meant to improve the scalability of the blockchain and develop a standard for interaction between various crypto-related entities.
- Hierarchical Deterministic (HD) account: HD accounts may be restored on other devices by using a backup phrase of 12 random words that’s created when you generate the wallet.
- Light client: Also called light nodes, light clients implement SPV, a technology that does not require downloading an entire blockchain to verify transactions. Depending on the currency, a full blockchain could be anywhere from 5Gb to over 200Gb. Thus, light clients tend to be faster than regular clients and require less computing power, disk space and bandwidth. Mobile wallets almost always use light clients.
- mBTC: Short for millibitcoin, which is one-thousandth of a bitcoin (0.001 BTC or 1/1000 BTC)
- Multi-signature: Multisig for short, wallets with this feature require more than one private key to sign and send a transaction.
- Open-source: Software that is considered “open-source” has a source code that may be studied, modified or redistributed by anyone. The source code is what programmers use to adjust how a piece of software works.
- Seed phrase: A string of 12 to 24 words generated by a crypto wallet. Users are recommended to write down this phrase in a safe location, since it stores all the information needed to recover a user’s access to their wallet and funds.
What are the best crypto wallets?
The best crypto wallets provide a good mix of security tools and user-facing features at a reasonable cost. According to our research, some of the best crypto wallets are Electrum, Coinbase, Ledger, Exodus and Mycelium.
Which crypto wallet has the lowest fees?
There is no single, static fee for every wallet. Crypto wallet transaction fees vary depending on the exchanges used for trading. Some wallets may enable users to pay higher fees to speed up the transaction.
How do I buy a crypto wallet?
Most crypto wallets are hot wallets, which may require a fee every time you process a transaction using the wallet. You can purchase cold wallets such as Trezor, Ledger, KeepKey and Opolo on their brand’s respective websites. Some may be purchased from third-party sellers, like Amazon, as well.
What is the safest crypto wallet?
The safest crypto wallet should provide the highest degree of security for your public and private keys. This includes technology such as 2-factor authentication and multi-signature support. If safety is your biggest concern, we recommend you take a look at our best offline wallet, Ledger, since cold storage wallets are inherently more secure than hot wallets.
How We Chose the Best Crypto Wallet
We looked at over 15 crypto wallets and evaluated them based on security, functionality, and cost. Because crypto wallets come in hot and cold varieties, we had to evaluate certain factors differently among them. For instance, the cost of using a hot wallet is hard to establish due to variable exchange, network and wallet fees, but cold hardware wallets are physical products that must be bought from a store.
The wallets included in our list scored high in the following categories:
- Safety – Safety is our top concern when dealing with crypto wallets. We favored wallets with 2-factor authentication, biometrics, multi-signature support, open-source code, and strong security protocols for transactions.
- Features – Features focuses on the general functionality of each wallet. Wallets with a larger number of tradable assets, live charts, staking and lending capabilities, and hardware wallet compatibility scored higher with us.
- Cost – The cost of a crypto wallet depends on the type of wallet. We favored reasonably priced cold wallets and hot wallets with exchanges that charge less for processing transactions. We also considered wallets with customizable transaction fees.