which cryptocurrency wallet is best for your money?Key factors you must consider when choosing the best cryptocurrency wallet include: the currency's security, ease of use, and which cryptocurrency can help you manage your money.

What is a crypto wallet?

A crypto wallet is primarily a device or software that stores your password (private key) for cryptocurrency transactions. Cryptocurrency wallets come in many forms, including hardware, software, and more, to make digital transactions simple and secure. In addition to processing transactions, the wallet is used for purposes such as encrypting messages and executing smart contracts.

Do you need a crypto wallet to own cryptocurrency?

You don't need a crypto wallet to own a cryptocurrency, especially if you don't have much and are unfamiliar with exchanges and the crypto world. But if your assets are piling up and you want more security and more control, then this might be a good time to look for the right wallet. Especially if your understanding of private and public digital keys and other aspects of cryptographic security is secure.

“The wallet is like a gateway into the crypto world,” says Bec Jones, CEO and co-founder of blockchain-app developer Clutch Wallet. “It’s the first product you download, and it’s the first thing you need.”

Digital wallets are similar to physical wallets in some ways, Jones said, but while your physical wallet may contain cash, credit cards, and even photos of loved ones, a digital wallet may contain online equivalents - cryptocurrencies, NFTS, and more.

Of course, digital wallets aren't made of leather, but strings of code -- they're software or applications (and sometimes physical hardware) installed on your computer or smartphone. Different crypto wallets have different features, Jones said, but most have basic features, such as exchange and send options and the ability to make purchases within the wallet. Many also allow users to connect debit and credit cards.

But digital wallets, like physical wallets, come in many types. One of the most important distinguishing features concerns custody.

How to Choose a Crypto Wallet

When you're ready to choose, you'll want to know if your crypto wallet is managed or unmanaged, hot or cold, and what other coins or tokens it can hold.

You also need to keep the price in mind. You can buy some cryptocurrency wallets at once, while others charge a fee to move assets in or out.

Campbell says you can start sifting through your options by considering whether the wallet has been on the market for a while. "Look at how long each wallet has been around. Are they battle-tested?" He said. And check to see if your wallet supports the type of cryptocurrency you're buying. "Not every wallet can afford to buy every token," he said.

In general, you need to consider these factors to narrow down your choices, taking into account your security preferences and trading/investing activities:

Trusteeship and non-trusteeship (self-trusteeship)

Storage type: Hot and cold

The number of coins and tokens supported

Purchase cost or expense

A good cryptocurrency wallet should:

Offer convenient buying and selling options

Support cryptocurrencies you're interested in, not just Bitcoin

Protect your crypto assets

It should be intuitive and easy to use

How to Protect Your Crypto Wallet

No matter which wallet you choose, be sure to put safety first. You need to securely store mnemonics, which are a series of words generated by your wallet that give you access to your cryptocurrency. It's basically the password your wallet makes for you. Therefore, you want to actually write it down and store it in a safe or vault, rather than writing it down on a piece of scrap paper next to your computer that could be lost or discarded, potentially locking you out of your wallet forever.

“It’s more likely that you’ll throw it away if it’s on a Post-It note,” says Charlie Brooks.

Campbell says that he has his seed phrase in a vault, and written down in two other separate locations. He recommends crypto investors do the same. “If you lose it, it’s gone,” Campbell says.

After all, your seed phrase is the key to your wallet. “Your wallet is your identity point,” says Jones. “It’s going to be a fundamental, daily-use product for people interacting on the web.”

So once you’ve chosen your wallet, make sure your seed phrase is protected and easily accessible to only you. “Keeping track of your seed phrase is much more important than choosing the right wallet,” says Chris Brooks.

How We Chose the Best Crypto Wallet

We looked at more than 25 crypto wallets and evaluated them based on security, functionality, and cost. Because crypto wallets come in hot and cold, we considered different factors. For example, the cost of using a hot wallet is hard to determine due to changes in exchange, network, and wallet fees, but a cold hardware wallet is a physical product that you must buy in a store.

The wallets on our list scored highly in the following categories:

Security - Security is our number one concern when dealing with crypto wallets. We favor wallets with dual or multiple authentication, biometrics, multiple signature support, open source code, and strong transaction security protocols.

Features - For features, we considered the general features of each wallet. Wallets with more tradable assets, real-time charts, collateral and lending capabilities, and hardware wallet compatibility score higher with us.

Cost - The cost of a crypto wallet depends on the type of wallet. We prefer cold and hot wallets that are reasonably priced, and exchanges have lower fees for processing transactions. We also considered wallets with customizable transaction fees.

Best Hardware Crypto Wallet: Ledger Nano S Plus

Pros

Install up to 100 apps at the same time

Buy and sell crypto directly through the Ledger Live app

Verify all transactions with 2-button presses

Compatible with 50 other hardware wallets

Cons

More expensive than its original entry-level wallet

Custom operating system is not open source

Why we chose it: We chose Ledger Nano S Plus as the best crypto hardware wallet due to its support for a large number of assets, stringent security framework and the ability to transact through the integrated Ledger Live application.

Ledger is one of the best-known names in the crypto space, and its hardware wallet is a popular choice for crypto enthusiasts. Its products stand out for using security components -- a type of chip commonly found in passports, credit cards and payment systems -- to provide an extra layer of security.

Its first wallet, the Nano S, was upgraded to the Nano S Plus in April 2022. It comes with an improved display, more storage capacity and a USB-C cable port. The Ledger Nano S upgrade makes the already robust entry-level product even more attractive compared to the Ledger Nano X.

The wallet costs $83.89, a convenient price point between cheaper and more expensive alternatives on the market today. It also measures 2.2 x 0.7 x 0.36 inches and has a 128 x 64 pixel screen, which means it's easier to carry around and loop through installed apps.

Other highlights include:

The first and only hardware wallet to be secured by a government agency (in Ledger's case, by French cybersecurity agency ANSSI)

The Ledger Live app, in addition to buying and selling digital assets, can be used to monitor, lend and pledge cryptocurrencies

What are the best crypto wallets?

Crypto wallets that have proven to be the best in 2022 are:

Coinbase wallet – these wallets are best for beginners

Electrum wallet – For users who trade only in Bitcoin, Electrum suits them well

Mycelium wallet – best for active investors that regularly use mobile wallets

Ledger Nano X – it is one of the best cold wallets to store your cryptocurrency

Exodus – suitable for beginners. Users can earn by staking and earning interest on their assets.

Cryptocurrency wallets are an essential part of crypto transactions because they securely store your digital currencies and assets. Because these wallets have strong security features and strong encryption, you can easily buy, sell, pledge or trade your currency and earn interest. In addition, these wallets allow users to become holders of multiple cryptocurrencies, making it a one-stop platform for storing and using myriad cryptocurrencies. So if you want to trade cryptocurrencies, make sure you have a crypto wallet. All you have to do is make sure which tokens are supported by these wallets and select the appropriate tokens for asset holding accordingly.