3 Reasons Cold Storage in Crypto Makes Sense During a Long Crypto Winter
For serious crypto investors, risk management is a primary concern. Once you've amassed a certain level of crypto wealth, you don't want to lose it to hackers, scammers, or cybercriminals. As a result, one popular risk- management technique is cold storage, which is a way of storing your cryptocurrency offline and away from bad actors on the internet.
Cold storage in crypto can take various forms. For billionaire investors, cold storage can involve armed guards, hardened underground bunkers, and giant bank vaults. For retail investors, cold storage typically involves a physical device resembling a USB stick that you can buy online for less than $150. For both billionaire investors and retail investors, there are three primary reasons to consider cold storage for crypto.
Over the past six months, the perceived risk of storing crypto on cryptocurrency exchanges has increased significantly. After all, there have been a number of high-profile bankruptcies and insolvencies in the crypto world during the current "crypto winter." At the same time, there is persistent speculation about the potential bankruptcy risk of popular cryptocurrency exchanges. In cases such as Voyager or Celsius, investors lost access to their crypto holdings for an unspecified period of time as soon as financial distress was announced. At a certain point, people started questioning whether these crypto holdings might be permanently frozen or used to pay off creditors later. All of this has made some crypto investors nervous.
Source Fool.com
