How to choose a cold wallet in 2025? A comprehensive guide to cryptocurrency wallet recommendations and usage

Why Are More and More People Turning to Cold Wallets?

As on-chain interactions explode, more and more people are getting involved in crypto assets. But a real issue is that many people poorly manage their private keys and seed phrases, ultimately forgetting them or being hacked, causing assets to vanish into thin air. For this reason, secure storage of crypto assets has become a necessity, and cold wallets have thus come into the spotlight.

In comparison, hot wallets are convenient but pose higher risks because they are always connected to the internet. This is why those with large holdings or long-term investors are beginning to pay more attention to cold wallet storage.

From Hot Wallets to Cold Wallets: Basic Concepts You Need to Understand

What is a cryptocurrency wallet?

Cryptocurrency Wallet (Crypto Wallet) is a digital wallet used to store, manage, and use virtual currencies. It can receive, store, and transfer assets like Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), Litecoin (LTC), and more.

Wallets are mainly divided into two types:

Hot Wallet also called software wallet, stored on online devices like computers and smartphones. The advantage is ease of operation; the downside is vulnerability to hacking.

Cold Wallet refers to wallets stored on offline devices, generally hardware wallets, but also includes paper wallets, USB wallets, etc. Due to being isolated from the network, they offer significantly higher security.

Core Mechanism of Cold Wallets: Public and Private Keys

To understand cold wallets, you must first grasp two key concepts:

Public Key (also called address) is akin to your account number, which can be shared publicly. Others can transfer assets to you via the public key.

Private Key is equivalent to your account password; possessing the private key means controlling all assets in the wallet. It must remain secret at all costs.

Additionally, there is Seed Phrase (Mnemonic), which is a human-readable version of the private key, usually consisting of 12 or 24 English words, mainly for ease of backup and recall.

How Do Cold Wallets Work? Two Key Steps

Step 1: Generate Public-Private Key Pair

When setting up a cold wallet, the device automatically generates a pair of public and private keys through encryption algorithms. The public key is used to receive assets, and the private key is used to transfer assets.

Step 2: Offline Storage of Private Key

Cold wallets generally do not connect to the internet, using physical isolation to store the private key, effectively preventing hacking and malware attacks. It’s important to note that a cold wallet typically stores only one private key, with a limit on the number of keys.

Three Cold Wallet Products Worth Considering in 2025

The market is flooded with hardware wallets, but only a few have stable reputations. Here are three trusted products:

Ledger Nano X: Support for the Most Coins

Manufactured by French company Ledger, this hardware wallet enjoys a high reputation in the industry. It supports over 5500+ cryptocurrencies, covering most mainstream coins.

Specifications: 72mm×18.6mm×11.75mm, weighing only 32g, portable. Security certification level reaches CC EAL 5. Price is about $149.

Trezor Safe 5: Higher Security Level

Produced by Czech company SatoshiLabs, it has a security certification level of CC EAL 6+, higher than Ledger. Its unique feature is a touchscreen, providing a more intuitive operation experience.

Supports over 1000 cryptocurrencies, enough for most users. Price is $169, slightly more expensive than Ledger.

SafePal S1 Pro: Best Cost-Performance Ratio

Supports over 30,000+ cryptocurrencies, covering almost all mainstream and niche coins. Supports both USB-C connection and QR code scanning, offering maximum operational flexibility.

Security certification level is CC EAL 5+. Its biggest advantage is the lowest price, about $89.99, making it more friendly for beginners.

How to Choose the Right Cold Wallet for You?

There is no absolute “best” cold wallet; the key is to weigh the following four factors based on personal needs:

Security First

The core value of a cold wallet is security. When choosing, pay close attention to the encryption strength, support for multi-factor authentication, presence of an independent security chip, etc. Different manufacturers have different technical solutions; strong security protection is the foundation for safeguarding private keys and seed phrases.

Compatibility Determines Ease of Use

Before spending money, confirm that the wallet supports all your cryptocurrencies. While most hardware wallets support thousands of coins, some may only support mainstream ones. If you hold niche coins, verify compatibility in advance.

Cost Should Be Within Your Means

Cold wallets range from dozens to hundreds of dollars. Think carefully before purchasing: Is this expense worth it? Is your asset scale large enough to justify this investment? Generally, long-term holders with significant assets find it very worthwhile to buy a good cold wallet.

User Experience Affects Long-Term Use

Although operation processes are similar, interface design and interaction logic vary greatly among wallets. Choosing a wallet with a user-friendly interface and clear navigation will make asset management much easier. You can check this information on official websites or read user reviews for real experiences.

Proper Usage Process for Cold Wallets

First Use: Generate or Import Keys

If you don’t have a public or private key yet, you can create one via a cold or hot wallet. If you already have keys, you can import your existing private key into the cold wallet.

During Transactions: Sign and Authorize

To initiate a transaction, connect the cold wallet to your phone or computer. Usually, you need to enter a PIN or password to unlock the device before proceeding.

Confirm Transaction: Verify and Execute

After initiating, verify directly on the cold wallet device (some also support operation via mobile or desktop software). Once confirmed, execute the transaction. After completion, disconnect immediately; the private key re-enters offline status.

Daily Management: Properly Protect Hardware

Although most cold wallets claim to be shockproof, waterproof, and fireproof, this is not an excuse for rough handling. Avoid violent impacts and drops; damage is irreversible. Also, back up your private key or seed phrase using paper or USB drives for emergencies.

Security Tip: Be Cautious When Connecting DApps

Never connect to unknown DApps or websites. If your cold wallet connects to a compromised app, it’s like opening a backdoor, making it just as vulnerable to attack as hot wallets.

Cold Wallet vs Hot Wallet: Which Is More Suitable for You?

Both types of wallets serve different purposes; there’s no absolute winner— it depends on your usage scenario:

In summary: If you are a long-term holder or have large assets, a cold wallet is essential. If you trade frequently, a hot wallet is sufficient, but it’s also recommended to store part of your assets in a cold wallet as a “cold reserve.”

Market Outlook for Cold Wallets: Will Hardware Wallets Become Standard?

According to industry data, the global number of crypto wallet users is about 68 million. In 2022, user growth exploded, reaching 80 million in just the first half of the year, surpassing the total for 2021. This demonstrates strong market demand.

The hardware wallet market is also expanding rapidly. In 2021, the market size was about $400 million, expected to grow to $3.6 billion by 2032, with a significant annual growth rate.

As demand increases, more developers are entering this space, intensifying market competition. But this competition is a good thing—major manufacturers must continuously improve their products: enhance security certifications, support more coins, strengthen cross-chain functions, and lower prices. In the long run, consumers are the biggest beneficiaries.

Conclusion: Cold wallets have evolved from niche tools to mainstream demand. Choosing a suitable cryptocurrency wallet recommendation and building a multi-layered asset protection system is becoming standard practice for holders.