Show Me the Money! A Beginner's Guide to Crypto Wallets 💰

Re:crypto #11 The Alternative For The Ordinary Individual

Author

Jeremy Loo
September 28, 2023

Show Me the Money! A Beginner's Guide to Crypto Wallets 💰

Welcome back 👋 to another action-packed edition of Re:crypto! This week, we're diving into one of the most vital aspects of the cryptocurrency world: what to do with your digital assets once you've acquired them. If you've ever wondered about cryptocurrency wallets and how they work, you're in for a treat! 🍬

Cryptocurrency Wallets: More Than Just a Digital Purse 👛

A cryptocurrency wallet 📲 is your gateway to securely storing, managing, and using your crypto holdings. These wallets store your private keys 🔑, which are essential for accessing and controlling your cryptocurrencies. There are two main types of cryptocurrency wallets, and each has its unique features:

Hot Wallets: Stay Connected for Convenience ⚡️

Hot wallets are like the extroverts 🙋‍♂️ of the crypto world. They're always connected to the internet 🌐, which makes them:

- Convenient: Perfect for trading 📈 and quick transactions ⚡️.

- Fast: Accessible whenever you need them ⏱.

- Examples: Web-based wallets 💻, mobile wallets 📱, and desktop wallets 🖥️.

However, like the life of the party 🥳, hot wallets can be vulnerable to online attacks 👿, potentially leading to stolen funds 💸. It's like leaving your favorite snacks 🍫 unguarded at a party!

Cold Wallets: The Fort Knox 🏦 of Crypto 

Cold wallets, on the other hand, prioritize security 🔒 over convenience. They're offline 📵 and are typically accessed through hardware devices 💾, such as a USB stick. Here's why they're like Fort Knox:

- Secure: Being offline makes them highly resistant to cyberattacks 👿.

- Physical Access: You need a physical device 💾 to access them.

- Examples: Hardware wallets 💾 and paper wallets 📄.

But remember, Fort Knox isn't known for its convenience ⏱ when you're in need of a quick snack! 🍫 Similarly, cold wallets are less convenient for everyday trading 📈 and spending 💸.

### Choosing the Right Wallet for You 👝

It's essential to choose a wallet 👛 that aligns with your needs and preferences. Are you a crypto newbie 👶 looking for simplicity? A hosted wallet 💻 might be your jam 🍇. Want full control 🎛️ and security? A non-custodial 😎 or cold wallet 💾 could be your best bet. Your choice depends on your priorities!

Additional Reading 📚

1. [Hot Wallets vs. Cold Wallets: What's the Difference?](https://www.nerdwallet.com/article/investing/hot-wallet-vs-cold-wallet)

2. [Hot Wallet vs. Cold Wallet - Investopedia](https://www.investopedia.com/hot-wallet-vs-cold-wallet-7098461)

4. [Hot Wallets vs. Cold Wallets in Blockchain](https://www.geeksforgeeks.org/hot-wallets-vs-cold-wallets-in-blockchain/)

5. [Hot vs. Cold Crypto Storage: What Are the Differences?](https://www.coindesk.com/learn/hot-vs-cold-crypto-storage-what-are-the-differences/)

Different Types of Cryptocurrency Wallets 👛

Now that you're familiar with hot 🔥 and cold ❄️ wallets, let's explore different types of cryptocurrency wallets:

Custodial Wallets: Easy Peasy 🍑, but with a Catch 🎣

Custodial wallets are the most popular 😎 and user-friendly option. When you buy crypto 🪙 through services like Coinbase, your crypto is held in a hosted wallet 💻. The pros:

- Easy Setup: They're a breeze 💨 to set up.

- Backup Recovery: No worries 😎 about losing your crypto if you forget your password 🤐.

- Cons: You don't have full control over your private keys 🔑.

Non-Custodial Wallets: Take the Reins 🐴 

Non-custodial wallets put you in control 🎛️. You manage your private keys 🔑, but it comes with responsibilities:

- Control: You have full control over your keys 🔑 and funds 💰.

- Security: More secure 🔒 than custodial wallets.

- Cons: No backup recovery options 🚫; you're solely responsible for safeguarding your keys 🔑 and funds 💰.

Hardware Wallets: The Vault 🏦 for Crypto

Hardware wallets 💾 are physical devices that store your private keys 🔑 offline. They're like the bank vaults 🏦 of the crypto world:

- Security: Top-notch 🔐, kept offline for safety.

- Access: Requires a physical device 💾.

- Cons: Less convenient ⏱ for trading and spending.

The Right Wallet for You 👛

Choosing the right wallet 👝 depends on your needs and preferences. If you're new to crypto 👶, a hosted wallet 💻 is a gentle introduction. For those who prioritize control 🎚️ and security 🔒, non-custodial 😎 or hardware wallets 💾 are the way to go.

More Information i️

1. [Best Crypto Wallets](https://money.com/best-crypto-wallets/) 👝

4. [Best Bitcoin and Cryptocurrency Wallets](https://www.nerdwallet.com/article/investing/best-bitcoin-cryptocurrency-wallet) 🪙

The Pros and Cons of Wallet Types ➕➖

Every wallet type has its pros 👍 and cons 👎. Here's a quick rundown:

Custodial Wallets:

- Pros:

- Easy to set up and use. 😃

- Backup recovery options. 🔄

- No risk of losing private keys. 🔑

- Cons:

- Less secure. 🔓

- Third-party controls your keys. 🤏

- Limited control over your funds. 💰

Non-Custodial Wallets:

- Pros:

- Full control over keys 🔑 and funds 💰.

- High security. 🔒

- No need to trust third parties. 🤝

- Cons:

- No backup recovery options. ⛔️

- User responsibility for key 🔑 and fund 💰 protection.

- Can be trickier to use. 😕

Hot Wallets:

- Pros:

- Internet-connected for easy access. 🌐

- Fast 🏃‍♂️and convenient for trading and spending. 💸

- Cons:

- Vulnerable to online attacks. 😱

- Less secure than cold wallets. ❄️

Cold Wallets:

- Pros:

- Offline for maximum security. 🔒

- Typically accessed via hardware devices. 💾

- Highly secure. 🔐

- Cons:

- Less convenient for transactions. ⏱

- Setup and usage can be more complex. 😕

Your choice of wallet depends on your priorities: convenience 😎, security 🔒, or a balance of both ⚖️.

Further Reading 📖

1. [Custodial vs. Non-Custodial Wallets](https://appinventiv.com/blog/custodial-vs-non-custodial-wallets/)

2. [Custodial vs. Non-Custodial Wallets](https://crypto.com/university/custodial-vs-non-custodial-wallets)

3. [Crypto Wallets: Custodial vs. Non-Custodial](https://www.gemini.com/cryptopedia/crypto-wallets-custodial-vs-noncustodial)

4. [The Different Types of Crypto Wallets](https://www.mtpelerin.com/blog/the-different-types-of-crypto-wallets)

6. [Non-Custodial Wallets vs. Custodial Wallets](https://bitpay.com/blog/non-custodial-wallets-vs-custodial-wallets/)

Hot vs. Cold Wallets: A Recap 🔁

Hot wallets 🔥 and cold wallets ❄️ are like the yin and yang ☯️ of cryptocurrency storage:

Hot Wallets: 🔥

- Always connected to the internet. 🌐

- Convenient for trading and spending. 💸

- Vulnerable to online attacks. 😱

- Wallet cost is typically lower as they're often provided by exchanges. 💰

Cold Wallets: ❄️

- Offline for top-notch security. 🔐

- Accessed through hardware devices. 💾

- Highly secure but less convenient for transactions. ⏱

- Additional hardware purchase required. 💳

Your choice depends on your priorities: ease of use 😃 or security 🔒.

More Information i️

1. [Hot Wallet vs. Cold Wallet - Investopedia](https://www.investopedia.com/hot-wallet-vs-cold-wallet-7098461)

2. [Hot Wallets vs. Cold Wallets - NerdWallet](https://www.nerdwallet.com/article/investing/hot-wallet-vs-cold-wallet)

4. [Hot Wallets vs. Cold Wallets in Blockchain](https://www.geeksforgeeks.org/hot-wallets-vs-cold-wallets-in-blockchain/)

5. [Hot vs. Cold Crypto Storage: What Are the Differences?](https://www.coindesk.com/learn/hot-vs-cold-crypto-storage-what-are-the-differences/)

Now to the Markets:

Top 10 by Market Cap

Top 10 Gainers & Losers

Bitcoin 🪙 

$26,372 💲

managed to stay above the $26,000 🎯 level even as the S&P 500 📉 tumbled to a three-month low 🔻 and the US dollar index (DXY)📈rose to a new year-to-date high ⬆️. This is a mildly positive sign 😊 as it shows a lack of aggressive selling 🙅‍♂️ at lower levels.

Bitcoin remains stuck inside a range 🚶‍♂️ and the directionless price action 📈📉 has kept the traders on the sidelines 🤔. Bitcoin’s daily spot exchange transactions 🔄 topped 600,000 📈 in March but dwindled down to 8,000-15,000 📉 last week, according to new research from on-chain analytics platform CryptoQuant 📊. Low liquidity ⚠️ could lead to volatile moves 📈📉 in either direction, hence traders 🤵 should be careful 👀 and wait for confirmations 📝 rather than taking positions 💹 on every intraday breakout 🚨.

Daily cryptocurrency market performance 📈. Source: Coin360 🔭

The near-term price action 📈 remains uncertain ❓ but that has not deterred the long-term bulls 🐂 from adding Bitcoin 🪙 to their portfolio 💼. MicroStrategy co-founder and executive chairman Michael Saylor 👨‍💼 announced on X (formerly Twitter) 🐦 that the firm had acquired 5,445 Bitcoin 🪙 at an average price of $27,053 💲 per Bitcoin.

Could Bitcoin 🪙 and select altcoins 🌟 start a short-term up-move? 📈 Let’s study the charts 📊 of the top 10 cryptocurrencies 🔟 to find out.

Bitcoin price analysis 🪙

Bitcoin 🪙 is witnessing a tough battle ⚔️ between the bulls 🐂 and the bears 🐻 near the 20-day exponential moving average ($26,436) 📈. The bulls 🐂 pushed the price above the 20-day EMA 📈 on Sep. 27 but could not clear the 50-day simple moving average ($26,757) 🚫.

BTC/USDT daily chart 📊. Source: TradingView 🖥️ 

This indicates that the bears 🐻 have not given up ❌ and are selling 📉 the rallies to the 50-day SMA 📈. The bears 🐻 will have to pull the price below $25,990 📉 to clear the path for a potential fall 📉 to $24,800 💲. This level is likely to attract solid buying 🛒 by the bulls 🐂.

On the upside ☝️, the first sign of strength 💪 will be a break and close above the 50-day SMA 📈. The BTC/USDT pair may then rise 📈 to $27,500 💲 and subsequently to the overhead resistance 🚫 at $28,143 💲. The bears 🐻 are expected to defend this level with all their might ⚔️.

Bitcoin Fear & Greed Index

Ether price analysis 🌐 $1,606 💲

is trying to start a recovery 📈. The price rose above 🔼 the 20-day EMA ($1,614) 📈 on Sep. 27 but the bulls 🐂 could not hold on to the intraday rally 🚀. This shows that the higher levels continue to attract sellers 📉.

ETH/USDT daily chart 📈. Source: TradingView 🖥️

The bullish divergence 📈 on the relative strength index (RSI) favors the buyers 🤑. If they retain 👍 the price above the 20-day EMA 📈, the ETH/USDT pair could first rise 🔼 to the 50-day SMA ($1,668) 📈 and thereafter attempt a rally 🚀 to the overhead resistance at $1,746 🎯.

Contrary to this assumption ❌, if the price remains below 📉 the 20-day EMA 📈, it will suggest that the bears 🐻 are in command 👮. The sellers 📉 will then try to yank the price below 📉 the important support at $1,531 💲. If that happens, the pair may crash 📉 to $1,368 💲.

Ethereum Fear & Greed Index

BNB price analysis 🪙 $212 💲

remains below 📉 the breakdown level of $220 🎯 but a positive sign ☑️ is that the bulls 🐂 have not allowed the price to slip below $203 💲.

BNB/USDT daily chart 📈. Source: TradingView 🖥️ 

The 20-day EMA ($213) 📈 is flattening out ➖ and the RSI is just below 📉 the midpoint 🔘, indicating a balance ⚖️ between supply 📉 and demand 📈. This equilibrium ⚖️ will tilt in favor of the bulls 🐂 if they kick the price above $220 📈. The BNB/USDT pair could then ascend 📈 to $235 💲.

On the contrary ❌, if the price continues lower 📉 and breaks below $203 💲, it will signal that the bears 🐻 have asserted their supremacy 👑. The pair may then start the next leg of the downtrend 📉 to the strong support at $183 💲.

The Latest in Crypto 🪙🌟

Lawmakers Make Moves on Crypto Regulation 💼

- Congress pushes for approval of Bitcoin ETFs 📈, major win for the crypto space!

- But a Congressman slams SEC's Gensler 😡 for his crypto stance, heating up the debate!

Exchanges Expand Their Territory 📈

- Kraken to offer stock trading 📊, diving into traditional finance!

- While Binance's dominance slips 📉 as rivals grab more market share!

Scammers and Shady Dealings ⚠️

- A CEO's crypto scam sinks local US bank 🏦, highlighting industry risks!

- Fraudster faces 12 years in jail 🚔 for $100M crypto Ponzi scheme!

Hacks and Heists 👿

- Mixin offers $20M bounty 💰 to hacker behind $200M breach!

- But Huobi hacker escapes 🚶‍♂️ with $8M, exposing security challenges!

Rules and Regulations 📜

- Gemini halts services in Netherlands 🚫 due to regulatory pressure!

- While the Fed warns on risks ⚠️ of stablecoins destabilizing finance!

Market Analysis and Insights 📈

- Huge win as Bitcoin declared currency 🪙 in Chinese court ruling!

- But MicroStrategy faces $520M loss 📉 on its Bitcoin bet!

- Meanwhile, crypto asset management could reach $650B 📈 in 5 years!

Global Growth and Partnerships 🌎

- Binance partners with banks 🤝 to launch stablecoins in Japan!

- As major European manager CoinShares plans US launch 🚀!

NFT and Web3 Action 🖼️🌐

- Report reveals 95% of NFT market now worthless! 📉

- But Web3 gains steam 🔥 with creators amid payment issues!

Tech Advances ⚙️

- Microsoft to expand crypto wallet support 👛 across devices!

- While Philippine bank gets license 🪪 for crypto trading!

Legal Drama and Controversy 👩‍⚖️

- SEC fights Celsius plan 😡 to use Coinbase for distribution!

- And FTX's SBF denied bail ahead of trial! 🚫

Global Crypto Developments 🌏

- Nomura launches Bitcoin fund 📈 for institutional investors in Japan!

- Standard Chartered's Zodia 🏦 brings yield to crypto holdings!

Government Rules and Regulations 👮

- UK passes bill to seize illicit crypto! 🚔

- As Thailand plans to tax crypto earnings! 💰

Investment and Funding 💸

- Blockchain Capital raises $580M 📈 for new crypto fund!

Security and Compliance Issues 🔐

- Coinbase hit by hack 👿, pays $1M, while victims await compensation!

- Coinbase report suggests FTX sales won't crash market! 📉

Institution Adoption and Services 🏢

- Citigroup launches tokenization service 🪙 with blockchain tech!

- And Grayscale CEO optimistic 😊 on US crypto bill passage!

Ongoing Oversight and Cases 🕵️

- SEC seeks feedback on Ethereum ETFs!

- Agency also requests court order 👩‍⚖️ to inspect Binance US!

Stay On Top of the Action! 🚀📈

That's a wrap for this edition of Re:crypto! 🎬 Remember, choosing the right wallet 👛 is a crucial step in your crypto journey, so take your time and consider your priorities. Until next time, happy hodling! 🚀💰