Do you keep your crypto on exchanges or in self-custody?

[loomka1999]

I've noticed that many people still keep a significant part of their funds on centralized exchanges because it's convenient for trading. At the same time, we've seen enough examples where exchanges froze withdrawals, were hacked, or even disappeared.

Personally, I try to keep only the amount I need for active trading on an exchange, while the rest stays in a hardware wallet. It takes a little more effort, but I feel much more comfortable knowing I control my own private keys.

How do you manage your crypto?

Do you trust major exchanges enough to keep large balances there?
Do you use hardware wallets, software wallets, or a combination of both?
What security practices have worked best for you over the years?

I'm interested in hearing different opinions and learning from other people's experiences.

[MarryWithBTC]

Mate, no where is completely safe. Just be personally conscious, follow news and be informed alert.

Coldcard vulnerability

This happened to to a high-security hardware. This has defeated your advice, if followed on logic perspective.

However, self custody is still the best, maybe a properly set up air-gapped device will be a better solution.

[batonidze]

For long-term holders, self-custody is definitely the only way to go. But as someone running active trading bots and market-making scripts, the dynamic is quite different.

To maintain liquidity and react to market moves quickly, you are essentially forced to keep active inventory on CEXes. Moving funds on-chain for every rebalancing act is just not feasible due to gas and bridge delays (unless we're strictly talking about L2 DEXes, but most volume is still centralized).

My golden rule is tiering:
1. **Cold Wallet:** Bulk of the portfolio, never touches an exchange.
2. **Warm Wallet:** Intermediary holding that can be programmatically pushed to exchanges if inventory runs too low via API.
3. **Hot Exchange Accounts:** Strictly limited to the maximum acceptable loss for active bots. If a CEX goes down (like FTX or MtGox), that capital is considered part of the trading risk premium.

It definitely adds operational overhead, but it's the only way to sleep at night when you're running strategies 24/7.

[robelneo]

I'm interested in hearing different opinions and learning from other people's experiences.

Since the Coldcard hacking, nothing is 100% safe, but between exchange and self-custody, I prefer the latter, its better that you are responsible for your coins, because if you are the one holding it, you are going to educate yourself take good care of your assets and you will be responsible to all of your action.
We are our bank, so we will employ the utmost security, there's to many issues if you rely on exchange, besides hacking your assets are exposed.

[MoparMiningLLC]

in self custody - I have zero exchange accounts with any funds - exchanges should be used to deposit funds - exchange to another currency - then withdraw funds

they should never be used to hodl the funds.

[crwth]

It depends on the reason why my funds are there. Most of the time, I have funds in an exchange because I'm trading them and hoping to increase my profits. It's also easier to convert them to fiat if needed. For me, it's okay to leave funds just for trading, but if I had large amounts, I would have them in self-custody.

Would it be ideal to like move funds from time to time? Or test your seed backup for it? I think about it like that sometimes.

[MoparMiningLLC]

It depends on the reason why my funds are there. Most of the time, I have funds in an exchange because I'm trading them and hoping to increase my profits. It's also easier to convert them to fiat if needed. For me, it's okay to leave funds just for trading, but if I had large amounts, I would have them in self-custody.

Would it be ideal to like move funds from time to time? Or test your seed backup for it? I think about it like that sometimes.

I can understand also if trading - that follows the deposit/exchange/withdraw also - just swapping for profits before you withdraw.

I dont use seed phrase wallets. I stick to keys I generate myself. I trust hardware wallets (hot or cold) about as much as I do exchannges - basically any funds on them should be considered lost and if they never disappear then you are lucky. I will let Bitcoin core itself create my keys that I use for storage.

I dont hold any thing other than Bitcoin either.

[Dareo]

Quantum computing is advancing slowly, and along with it, new security risks are also emerging. The recent Coldcard incident has also shown that even a hardware wallet cannot be said to be 100% risk free. Therefore it is important to always be aware of security. Personally, I keep only as much as I need to convert to fiat on the exchange. I keep the rest in self custody wallets.

However, if you talks about 100% security, then there is no alternative to real assets. There is no risk of cyber attacks on assets in land or physical gold. Of course they also have different risks, but at least you don't have to worry about cyber hacking . And if you have a large amount of assets, I would say divide them among different types of assets instead of keeping everything in one place. Be it digital or physical.

[coin-investor]

How do you manage your crypto?

I'm interested in hearing different opinions and learning from other people's experiences.

I'll base this on my experience; I used to trust exchanges because they were easy. You don't think about security because they take care of it for you, as long as you keep your login details safe, but when the exchange goes down and I did not recover my coins, that's what too much trust in a third party brought me.

I learned to be responsible and to be educated on how to keep my assets because part of being an investor in this space is learning and being responsible; you have to live by Satoshi's idea of decentralization to remain in this space.

[BitMaxz]

I don't have hardware wallets yet, but I am planning to have one. However, I feel I better trust my own way to secure my wallet than using 3rd parties, just like what happened to the recent Coldcard hack.

The exchange is also not a good place to hold coins since we do not have full control of our wallet.

For me, having a separate device to hold my wallet and keys and keep them away from the internet is way safer for me. I haven't experienced any issue yet, and I can process and sign a transaction offline and broadcast the signed transaction to the other device; it works like an air gap.
The only problem is not all coins have this style of wallet where you can run them offline, but if you prefer a multiwallet or support multiple coins, then your only option is to use a hardware wallet, which is safer than using an exchange wallet or hot wallet.