Bitcoin Forum

Common advice is to keep your currencies safe by placing them into storage. I feel this is risky considering coins have dumped to all time lows within short periods of time. The alternative would be to keep them on an exchange and set stop losses, however, this is also risky as exchanges or your account can be compromised. How do you manage these risks?

You either are a belieber in bitcoin, or you're not.

If you're not, you could either choose not to buy it, or as you said, have some faith in the centralized exchanges, and place stop loss orders for when bitcoin drops too low.

Can't stress it enough though: not your keys, not your coins.

Only buy what you can afford to lose.

I keep all of my bitcoin’s in cold storage. I am the only person who has access to my private keys. I’m a long term HODLER, I have no intention to be a day trader.

For guaranteed profits - HODL
Day trading is for idiots

Leaving your coins on exchanges is a recipe for disaster.

Not your keys - Not your bitcoin.

It's one thing to prevent theft, and another to prevent losses from price movements.

Indeed BTC markets are quite volatile with FIAT pairs, but that doesn't mean theft isn't worse.
You could still recover coins from a private key wallet pretty fast if you have the software in place. The security it provides is taking advantage of bitcoin's positive properties to the maximum. Holding BTC in an exchange might allow to trade to FIAT a few minutes faster but the risk of losing everything if the exchange goes bust is overpowering any advantage.

Since you seem to talk about altcoins, I'd say keep them on exchange and use stop loss orders, because the risk of a coin crashing is much higher than your account getting hacked. Just make sure to use 2FA and password manager with truly random password for both your account and email, and never install any risky software on your device to avoid getting malware.

If it's Bitcoin, or some not completely bad altcoin like Ethereum, and we are talking about big amounts, then you should use cold storage.

Whenever a coin I own is dumped to All-Time Lows, I just buy more of it to decrease the average price I've invested at. This is how I minimize my losses and it's worked every time.

I'm hodling them all. Haven't sold a crypto in my entire life (for fiat). It's something that's gonna be worth a shit ton of money one day and if I won't get to benefit off it, my kids will. I haven't entered this game to dump my holdings. I'm just hodling them all and living a happy life watching BTC grow. My Nano S is probably the most precious thing I'll ever own.

I've done day trading but always failed. I have some kind of talent to hit the Buy button whenever price decreases and the Sell one right before a parabolic movement. I've done a lot of altcoin trading and what I found out in the end is that, although some of my moves got me a lot of profit at the time, if I were to hold BTC until today without selling it for any kind of alt, my total holdings today would've been worth approximately 50% more. Hence, trading BTC for alts and vice-versa when prices changed did get me profit at that moment, but on the long term that profit decreased dramatically.

How far can a 16 hour candle move? I don't know what the biggest move we've seen is but if we assume that's the longest you'd have to stay away from your funds then we can also assume your funds shouldn't see too much of a crash in this time (i.e time between you sleep or even checking your messages once in the morning and once in the evening - since you can easily set alerts on cointracking apps)...

You can also use multiple apps and most phones retain data connectivity pretty well so if you have coinbase and binance for example then you should get a good idea as to where a coin is at.

If you don't have any intention to sell your coins at some time, no need to put them on exchange. And even let's say you put them on the exchange, why set up a stop-loss if your purpose is just to hold. Your coins will still have the same quantity, bull or bear. The values of it are the only ones that will change).

It's not wrong to put your coins on the exchange so you won't be late when you want to sell it but to lessen the risks, choose only those reputable and big exchanges and you should know what's the risks. But only do this if you intend to sell your coins and will not wait for long.

But to lessen your worries that the exchange might turn into scam no matter how big it is (although it won't likely happen now), then just transfer your coins when you want to sell it. Transferring your coins from your own controlled storage to exchange or trading sites will not consume much time.

it mainly depends on what you are holding and why!

for example if you own bitcoin and  the reason is because you believe in its long term future then the answer is obviously to keep the bitcoins in cold storage instead of leaving them on exchanges in open orders and stop loss orders.

but if you own altcoins and the reason is because you want to make profit then you must store them on exchanges since altcoins are always pump and dumping and have no long term future. as a result you want to be able to dump them as fast as possible when their dump ends.

It's still goes down on the potential of the coin, I will be storing it in a cold wallet if I know the potential of the coin, but will never store it in exchange it has been advised hundred of times there is a huge risk storing your coins in a wallet, because you have no control on it, and the to many hacking going on.

Store your coins in the place you have full control of private keys, mnemonic seeds is the best.
You can make deposit to exchanges and sell your coins. Don't worry about flash dumps because price will recover later. Of course, I am saying about good coins, not scam ones. With scam coins, whenever their team finish their planned fundraising, they will do scam exit, and price will hardly recover to where it is (all time high, ie.).
Stop losses can be used but it can not completely protect you.
Sometimes, stop loss orders get errors (it mostly occur in flash crashes). Do you think of why we have flash crashes? Partially because of stop loss traps and errors.
Sometimes your exchanges make scam exit and you lose your money. Lose it all.

Don't let your stop losses eat all of your money.

This will work also, even the OP talking about stop-losses, he/she just wants to become well-updated on prices of his/her cryptocurrency.
It's not totally a stop-loss feature on an exchange, he/she will still decide at the end, like if the OP wants to stop-loss or cut losses, he/she manually transfer again those coins back to the exchange and sell it immediately at losses.
The only problem here is the withdrawal fee on the exchange + transaction fee for depositing it again to the exchange.

In the first place, it is completely different if we decide to store our crypto to exchanges or to our personal wallets such as hardware. But to think of the fact that this two do actually have their own meaning and purpose could help us to make our decision such as considering that exchanges are platforms for buying and selling crypto, and wallets that are intended to store our cryptocurrency.

Though, you can store your crypto in exchanges, I advise that you just do it when you want to risk your fund and you want it to grow through trading. Or else, store it in Nano or trezor to make sure that your funds will be safe in a long term.

I also think OP is talking about altcoins, and not about BTC. Some may say that altcoins are not something we should worry too much about (regarding security), but if you have some altcoins worth $10 000 on exchange, you take same risk (in terms of hacking) as if you hold 1 BTC.

You should always find a way to reduce risks to a minimum, and the first thing is maximum account security on exchange, which include unique e-mail with strong password only used for that exchange (this way user can avoid phishing e-mails), strong&unique password on exchange and real 2FA protection (no SMS). Link to access exchange should be saved in bookmarks, never use search engine to log-in to your exchange. Also it is important to save your log data in a way that it can not be hacked, so do not use unencrypted documents or any online storage.

Unfortunately the risk of exchange hacking is something that the user cannot influence, but what can be made is the choice of an exchange that has the highest level of security and years of experience. It is a well-known fact that top exchange holds only about 2% in hot wallets, which is certainly a good security practice.

To answer your question, let me tell a short story.

During the ICO bubble where every project including shitcoins were massively pumped, most investors (– not really traders) joined a community initiative – The Hodl gang. Here's what happened when majority of them held those tokens till 2018; they experienced 50-80% loss in value of the coins they held.

The moral of the short story is that, Don't be greedy and then You shouldn't leave money on the table while you're holding(/hodling). If they didn't get emotionally attached and greedy to those token, they wouldn't have lost so much.

So here's what I suggest is:

– Properly analyze and buy your favorite coin.
– set an OCO (One Cancels the Other) order  on binance or if you use a different exchange, set a stop loss.
– If the market goes your way, sell and buy at a retracement.

That way, You'll still be holding your favorite coin but your stash will keep growing as well as the value.

Most of you are correct, I am talking about altcoins. I am really not that interested in holding any of them but I use them to accumulate more bitcoin as their returns are greater.

Lets use MATIC as an example. MATIC went up 300% in just a week (in december). It then dumped back to where it started in just a few hours! This is an extreme example of course, but it happens. If I kept MATIC on the exchange and set a stop loss I would have made out with some pretty awesome profits. Had I moved it to storage I would likely be in a deficit. So I guess the question is, is it worth it to keep your coins on an exchange so you can avoid price drops (like the ones weve had in the last few days). Or does the risk of the exchange somehow losing your coins outweigh this?

I mean, if you do a good job of securing your accounts (2FA, etc) should you really be that worried that an exchange could get hacked? I use Binance, by the way.

It depends if you want to make money or not.
If you want to make money you have no other option than to place a part of your funds on a exchange and to trade them, at least from time to time. Unfortunately Bitcoin adoption is not growing anymore since several years.

You use Binance and I know you have the feeling that it's one of the best exchanges, which is correct by the way,  but news flash is that even Binance is not unsusceptible to cryptocurrency hacks on exchanges. And another tiny piece of information is that when your funds are on an exchange, securing your accounts isn't the issue, as you're not in total control of your funds, so once the exchange has been breached by hackers, there is a high chance you will lose your funds to them.

Has this every happened to Binance?

Prevention is better than cure.

Remember with bitfinex lost 33% of its cryptocurrency reserves? It's only done that once, are they still secure?


I see both of those ideologies as being equal, a company shouldn't have the opportunity to lose your funds especially in this space and if they do that's your problem most of the time as per their terms and conditions.

To manage this is to convert your altcoins into bitcoin or USDT and keep it on a hardware wallet.

Whichever you prefer will do if the market isn't doing good. Exchanges might halt the transactions of withdrawals if something good or bad happens. Usually, the most conservative are the ones that are losing more because of their consciousness of not losing more. And the most relax ones and the people who are keeping their assets safe and just holding the ones to recover quick.

This is true. If you have an asset that are altcoins I dont think its bad to store it on exchange especially if your goal is to trade it for some major coins such as btc.

Most of users here of course are using hard wallets for storing bitcoins. We all know that its the most safest. I did plan already on buying my hardware wallet this year but in my case. Im storing it on a third wallet trusted app though still risky.

This is what Ive always do. But I am storing most of my btc asset on Binance cause Im using it for trading, so it will really depends on how you need it. For holders, put it on a hardware wallet. For traders, good to secure one too but keeping it on a spot balance still okay as long you trust the exchange or platform.

that is a terrible advice if the plan is "storage" not short term trading.
as someone who actively trades, it makes sense to use Tether to escape the high volatility of altcoin market specially during the mass dump seasons. but as someone who wants to "store" for longer periods of time you must never touch a centralized and crappy altcoin such as Tether (aka USDT). it is highly risky to use that. it can disappear in any moment and it doesn't matter how safe it looks so far.

I don't think this has happened with Binance News like this has not been heard so far  Binance is a very popular and reliable site I have invested here and loses a few dollars stops If my capital goes down it will sell itself. There is no fear of being scammed and hacked.

2FA is just to secure your account of exchange which only saves from anyone to login to your account even if they got your password.But it doesn't save exchange's wallet so if exchanges get hacked ou will lose your money.

Binance also got hacked in the past but users lost amount were refunded by Binance itself so remember any exchange can be hacked.

Why because its an "altcoin"? Tether is also supported by some hardware wallets so I dont get why its different than bitcoin? For trading isnt advisable cause as what you mentioned its great use is inside the exchange to defeat volatility. Storing purposes what's the difference? Nothing isnt it. I dont think a top 6 market cap coin would suddenly vanished in any moment.

Except if your national currency is a shitcoin against the $ you won't make any gains by holding USDT  :-\ It's certainly more profitable to place your funds in fiat in a saving account at your bank IMO.
If you trust Tether why not holding their gold stablecoin XAUT instead? At least you would hold gold, not USD...
BTW you can't store Omni USDT on Ledgers AFAIK

Yes, traders usually want to liquidate it when there's time or if they want to. While the holders, nothing to think about it but to put it to a safe place like hardware wallets and as much as possible we're avoiding it to store on any exchange.

You are right. I didn't mention the span of how long you should store it. So there's an exception for traders and holders. For holders, bitcoin is the safer choice and for traders, to save the current market value of your asset then USDT for short term use or if not confident with Tether, some other choice for stable coin.

the difference with bitcoin is obvious! it is the centralization of Tether. it is owned by Bitfinex parent company and is 100% controlled by them. and that means it is highly risky to use it let alone to store it for long term.
on top of all that, this company has always been shady about Tether. they assure you that it is backed by dollar with 1:1 ration but they have never been able to provide any proof or guarantee nor were they ever properly audited. they always evade it!

as for market cap, that is the problem nowadays with people, they think just because a website called coinmarketcap.com ranks a coin on top then it must be good or safe to use! they should really stop doing that and start looking into altcoins from perspectives that matter like the things i mentioned above. market cap is meaningless.

They have rights to issues as many Tether USD as they want (if we assume that they don't really have dollars back for Tether USD at the ratio 1:1 as they claimed to do). There are many FUDs on this (but I thing they are rights) and manipulated the market with bad news relate to Tether USD and Bitfinex times to times. No one knows the severity of this issue, but I believe there are issues with Tether USD.
In fast changing market like crypto, market cap does not make any sense. Price can skyrocket and lift total market cap up and in contrast, when price flash dumps we will see marketcap drops quickly.

There is another thing, premined, instamined coins/ tokens and hold by their teams. Those amount of coins/ tokens should be excludd from marketcap.

In terms of investment looking into top 10 in a website called coinmarketcap wouldnt hurt a bit. There are people trusted the ranking of cryptocurrency coins listed there. Yeah youre definitely right. Good or safety of coins must not be dependant on that? Can I ask? for people who dont have much experience and knowledge which reference should they seek advise or any legit website to depend on? I appreciate if you could recommend some.

Most investors and traders response, when newbies asking which coin to invest with, I am sure more of them will response just choose top 10, 20 or even 50 in the market to be safe (pretty sure they are referring to CMC). There is no such thing as safe, cause even bitcoin its still risky. Dont see much difference aside from the centralization of tether and btc when it comes to OP's topic IMO.

People who don't have enough knowledge and experience shouldn't be investing in the first place, they should learn until they are able to make their own judgement and not rely on some public websites to tell them where to put their money, because its a sure way to lose them.


There's a huge difference between Bitcoin and every other coin - Bitcoin is the king of this market, and alts always mirror its performance. Altcoins are much more riskier than Bitcoin, thousands of them have already died, but Bitcoin is still alive and well.

Yes no decision ormove is safe at all for everything we do here inside the crypto involves risks but having to invest into a coin that belongs to the top 10, 20 or 50 of exchanges specially cmc will have huge less in the risk you are taking, for people who don't have much knowledge to dependently decide which coin to chose it is really better to lean on popular sites likes cmc.