More secure ways of storing bitcoin?

[bitnote]

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

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[Russlenat]

I think this article would answer that.

Why 92% of Institutional Investors Store Crypto on Exchanges

However, although things have improved since 2018 (the institutional crypto custody space now has well-renowned participants like Fidelity, Coinbase, and ICE’s Bakkt), a recent study conducted by Binance Research found that institutional investors don’t seem to be using these custody services; instead, 92% of the institutional investors that responded to Binance’s survey said that they prefer to keep their crypto exactly where most experts least recommend--on centralized exchanges.

As we can see, they place trust in major exchanges with the money entrusted to them. I can understand the reasoning behind this; an exchange that operates daily is more susceptible to hacking. The fact that they continue to operate reflects the effectiveness of their security measures. Additionally, I believe exchanges like Binance offer insurance on the funds deposited with them. In the event of a hack, which has occurred to Binance before, the SAFU fund, if I recall correctly, would come to the rescue.

[Orpichukwu]

For trust and security reasons, most of them also make use of multi-signature wallets, but they are basically using some of the most secure hardware wallets, as stated by Cantsay.

Large amounts of bitcoin belong to an organisation, which means different people bring money together to buy that bitcoin, which they store to be used in the future. Such bitcoin is stored in a place where it will require just more than one person to access it.

I mean, they will need like three trustees who can come and do a transaction before any single Sat can be moved out of the wallet, in order for one of them not to be tempted and take a hard decision of spending the money without anyone's knowledge.

[Zaguru12]

I think this article would answer that.

Why 92% of Institutional Investors Store Crypto on Exchanges

As we can see, they place trust in major exchanges with the money entrusted to them. I can understand the reasoning behind this; an exchange that operates daily is more susceptible to hacking. The fact that they continue to operate reflects the effectiveness of their security measures. Additionally, I believe exchanges like Binance offer insurance on the funds deposited with them. In the event of a hack, which has occurred to Binance before, the SAFU fund, if I recall correctly, would come to the rescue.

Exactly the SAFU funds idea was created around 2018 and it is said that 10% of trading fees will be going into it and as at of last year it was announced to hold around 1 billion in coins like bnb and btc. But if you look at the logic of how this SAFU funds are save you will be your own bank. The exchanges themselves safe their funds on cold wallets, a clear example of this is that the SAFU funds it self is saved there. Now do we all think that the cold wallets can still be hacked from exchanges? I doubt.

The vulnerability of using cold wallet is almost similar even if it is set up by you or by an exchange. And we all know that this SAFU funds, the amount the exchange announce to users are just to keep them at peace and trust them but in a nutshell it is not the right amount there just like the FTX reserve funds reviled during this their saga. Even if an hack happens it usually just take plenty of court time before even half of the funds are refunded. So I believe that there are other hidden things behind institutions trusting exchanges to hold their funds for them rather than trusting this SAFU funds. Institutions have the ability to set up a multi sig cold wallet by them selves and protect it from hackers better than trusting exchanges that use similar method of storage

[bitterguy28]

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

It is not for us to know  lol , but of course they are using more protection that usual crypto holder(though we are all advised to keep our coins safer in how we need it to put)

They mostly use hardware wallet to keep their bitcoin.

But it is correct that one of the safest is Hardware wallet , actually this is also what I am using now , have just purchased mine months ago and yes now i felt more secure in holding my precious coins.

[SquirrelJulietGarden]

Institutional investors have these and those. Some store their bitcoin on centralized exchanges, in online accounts, in custodial wallets. These types of institutional investors are most popular according to the reseach above. But there are institutional investors store their bitcoin in non custodial wallets that are recommended by experts.

They usually don't care to use non custodial wallets because they trust centralized platforms that provide them services to spend money to get bitcoin. Like Bitcoin Spot ETFs that are very wanted because some institutional investors feel like they don't have time or enough security knowledge, system to secure their Bitcoin wallets. It is a wrong thinking but hope they will not lose big money eventually.

[Lucius]

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

As others have already written, rumors say that such investors still choose custody options that are supposedly based on cold wallets and therefore should be beyond the reach of hackers - and most CEXs claim that only a small part of the cryptocurrencies they keep for their clients is in hot wallets.

I would conclude that large and ordinary investors consider CEX as some kind of crypto bank, which of course does not make much sense when it comes to Bitcoin. Although such funds are always at risk, perhaps considering the knowledge of these people, it is a safer option than non-custodial wallets. Being your own bank is not easy and carries with it great risks, and sometimes it is much easier to leave those risks to others.

No matter how we look at this question, the fact is that there is only one correct answer - that regardless of the custody storage method, the well-known saying "not your keys, not your coins" still applies.

[tabas]

For trust and security reasons, most of them also make use of multi-signature wallets, but they are basically using some of the most secure hardware wallets, as stated by Cantsay.

Those that are serious and have an idea technically on how to keep their assets/Bitcoin as an organization, they have to keep it through a multi-sig wallet and so that no one from the organization could run away with funds easily if ever someone from them intended to do so.

I think this article would answer that.

Why 92% of Institutional Investors Store Crypto on Exchanges

However, although things have improved since 2018 (the institutional crypto custody space now has well-renowned participants like Fidelity, Coinbase, and ICE’s Bakkt), a recent study conducted by Binance Research found that institutional investors don’t seem to be using these custody services; instead, 92% of the institutional investors that responded to Binance’s survey said that they prefer to keep their crypto exactly where most experts least recommend--on centralized exchanges.

As we can see, they place trust in major exchanges with the money entrusted to them. I can understand the reasoning behind this; an exchange that operates daily is more susceptible to hacking. The fact that they continue to operate reflects the effectiveness of their security measures. Additionally, I believe exchanges like Binance offer insurance on the funds deposited with them. In the event of a hack, which has occurred to Binance before, the SAFU fund, if I recall correctly, would come to the rescue.

This is crazy, they lean on each other's back and having that guarantee that their funds are all kept, stored and protected by the exchanges. I guess that we'll still see a lot of series from these platforms that their funds will be gone due to these attacks to the exchanges. While there could be the insurance that they give or allows these institutions to avail it, another reason could be is about liquidation.

[hatshepsut93]

I think this article would answer that.

Why 92% of Institutional Investors Store Crypto on Exchanges

However, although things have improved since 2018 (the institutional crypto custody space now has well-renowned participants like Fidelity, Coinbase, and ICE’s Bakkt), a recent study conducted by Binance Research found that institutional investors don’t seem to be using these custody services; instead, 92% of the institutional investors that responded to Binance’s survey said that they prefer to keep their crypto exactly where most experts least recommend--on centralized exchanges.

As we can see, they place trust in major exchanges with the money entrusted to them. I can understand the reasoning behind this; an exchange that operates daily is more susceptible to hacking. The fact that they continue to operate reflects the effectiveness of their security measures. Additionally, I believe exchanges like Binance offer insurance on the funds deposited with them. In the event of a hack, which has occurred to Binance before, the SAFU fund, if I recall correctly, would come to the rescue.

This poll surveyed 76 entities - it's not clear how representative this is, and whether they were chosen randomly or if they all are Binance clients. Also, the full results show that 33% hold coins in cold storage and 18% use hot wallets. This means that the responders use different storage methods simultaneously. And without knowing the proportion of allocated coins, this poll is not very useful. It could be that many investors hold the majority of their coins in self-custody while having a smaller share of their coins on exchanges for day trading.

[kingvirtus09]

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

There are numerous ways for us to securely store our bitcoins, but the only few that come to mind right now are storing them in the proper locations, such as a safety box, a paper wallet, or a bank vault.

Don't forget to frequently backup your Bitcoin so that, in the unlikely event that you lose it, you can still retrieve it. You can do this with a USB or flash drive, which is what I'm doing at the moment because I don't yet have a hardware wallet. Don't merely reveal the wallet address or private key to people you know, of course.

Secure ways of storing Bitcoin:

* https://www.forbes.com/advisor/au/investing/cryptocurrency/what-is-the-safety-way-to-store-crypto/
* https://www.investopedia.com/news/bitcoin-safe-storage-cold-wallet/

[legendbtc]

None of us belong to any organization so you won't get an answer from them but as an individual investor, as I know and as everyone has mentioned, hardware wallets are lthe best storage method available to us today. Most people get hacked due to investor carelessness, I have not heard of any errors coming from wallets like Electrum or hardware wallets. So you need to pay more attention to how you store your seed phrases instead of looking for the best from what the organization is doing.

[BlackHatCoiner]

Tip: don't listen to crap stats when it comes to cryptocurrencies. "Lies, damned lies, and statistics" applies.

instead, 92% of the institutional investors that responded to Binance’s survey said that they prefer to keep their crypto exactly where most experts least recommend--on centralized exchanges.

Ahhh. Yeah. The experts which recommend storing bitcoin on centralized exchanges. Who are they by the way? Imaginary I suppose. 


As I have previously said, institutional investors prefer the regulatory oversight and convenience a third party provides, so it's pretty reasonable. I also don't expect them to know much about bitcoin.

[Plaguedeath]

None of us belong to any organization so you won't get an answer from them but as an individual investor, as I know and as everyone has mentioned, hardware wallets are lthe best storage method available to us today. Most people get hacked due to investor carelessness, I have not heard of any errors coming from wallets like Electrum or hardware wallets. So you need to pay more attention to how you store your seed phrases instead of looking for the best from what the organization is doing.

If it's due to investor carelessness, even they use hardware wallet, they're still prone to get hacked since using hardware wallet itself doesn't make you secure. If you connect your hardware wallet to unsafe device, your wallet could get hacked.

Electrum isn't a hardware wallet too, it's only a software though you can create your own cold storage using Electrum.

[Sim_card]

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

It depends on how the institution understands the safest means for them to keep their bitcoin . Some institutions might believe that exchange is the best place for them to keep their bitcoin safe, because they don't want to put the burden and blame if anything happens to their investment, they have who will be held responsible because they don't want to take the risk of keepin their bitcoin themselves. On the other hand, institutions that understands that it is only them that can keep their bitcoin safe, will use a hardware wallet so that they can be in full control of the safety of their coins. Such institution will go at any length to make sure that their funds is safe since they already understand that they are the one that will be responsible for any hack.

[Z390]

Is there something more secured than a hardware wallet and multi-signature-capable wallets? I don't think there is something special that institutional investors use to secure their crypto assets than these two options, but there are other ways to keep your keys safe too whatever you plan to do, make sure your keys are stored offline.

These investors are big players in this space and they are more powerful than retail investors, so they don't always move all their funds off the market, they can also manipulate the market if they have the chance to, and that's why they always lose money some times if a centralized exchange collapse.

I remember that this was why Kevin was mad with CZ when he exposed the FTX exchange, the main point I got from Kevin's mouth was the millions of dollars trapped and gone, he was a big investor but not really pained about the atrocities committed by Sam but he was mad that CZ ruined the corrupt exchange.

Institutional investors have money fixed everywhere, in wallet, on exchange, in staking protocols, you name it.

[Aikidoka]

I believe the best way to store Bitcoin is by keeping it offline. This involves using a hardware wallet or an air-gapped device and making sure that you store your seed phrase on a piece of paper that only you have access to.

Another secure option is to use a multi-signature wallet. This method requires three seed phrases to access the wallet, which makes it highly secure. If you're holding a huge amount of money with friends, this method can be a good choice.

[Bureau]

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

Since the amount of Bitcoin is unimaginable and unrealistic for people like us as they think we are not worthy to have Bitcoin, I think they would first prefer self-custodial wallets with multiple signatures. The next thing that comes to my mind is a custodial wallet as they do not want to take the pain of setting up a new wallet. I believe custodial wallets are what they use to store their Bitcoin as they are third-party responsibility and if anything happens they would blame the wallet provider. The next they would do is to insure those wallets as they do want to get profit in case the wallet gets compromised. Isn't this what they have been doing since the day centralized governance started?

[m2017]

I think this article would answer that.

Why 92% of Institutional Investors Store Crypto on Exchanges

However, although things have improved since 2018 (the institutional crypto custody space now has well-renowned participants like Fidelity, Coinbase, and ICE’s Bakkt), a recent study conducted by Binance Research found that institutional investors don’t seem to be using these custody services; instead, 92% of the institutional investors that responded to Binance’s survey said that they prefer to keep their crypto exactly where most experts least recommend--on centralized exchanges.

When I saw this text, it horrified me and the first thought that came to me was “have they gone completely crazy”? It's complete madness to store cryptoassets on exchanges. This takes away almost all the benefits of cryptocurrencies.

As we can see, they place trust in major exchanges with the money entrusted to them. I can understand the reasoning behind this; an exchange that operates daily is more susceptible to hacking. The fact that they continue to operate reflects the effectiveness of their security measures. Additionally, I believe exchanges like Binance offer insurance on the funds deposited with them. In the event of a hack, which has occurred to Binance before, the SAFU fund, if I recall correctly, would come to the rescue.

But after reading the post to the end, I came to the conclusion that completely different rules apply for institutional investors. Or rather, they live differently from small crypto holders.

In essence, institutional investors use cryptocurrencies like some kind of stock market shares and are a speculative instrument. Therefore, storage also turns out to be original and appropriate. Shifting the responsibility of storing crypto assets to exchanges, even in a sense, into the hands of institutional investors. No matter how paradoxical it may sound, the risks with secure storage are reduced, because they place all responsibility on the exchange and hope that the exchange will enforce guarantees (compensation for damage in case of theft or hacking). Also, in this case, there is no need to create own secure storage system, maintain it in working order and bear your own risks. It seems that institutional investors are even better off this way, unlike ordinary cryptoholders. Although, for sure, there will be many of these among ordinary holders. It seems to me that the cryptoindustry is increasingly becoming centralized and dependent on big platforms like binance, which is not good at all.

[mk4]

If I were to bet, a good chunk of them use self-custody; but they wouldn't expose how they store their holdings specifically due to potential security problems.

For the typical day-to-day person though, I'd recommend just using a hardware wallet and storing the 12-24 word recovery phrase on a piece of paper or steel sheet. That's it; keep it simple.

[crwth]

It's best for companies to have that insurance for their assets and probably the exchanges that could do that are the top ones like Binance. They are basically having that care by them and I think it makes it easier for them if they do that. I think it's still best for them to have that as an institutional investor. For them to operate as big as them, they have probably top-notch security with all the prevention of future hacking etc.