Seven out of ten investors hold their cryptocurrencies on centralized exchanges, while three out of ten prefer cold wallets.
According to CoinGecko’s observation of crypto storage behavior following the FTX crash, eight out of ten crypto investors store their digital assets in hot wallets.
At the same time, the survey report showed that seven out of ten respondents said they store their assets on centralized exchanges, while another three out of ten said they use cold wallets.
The survey
The study was conducted between December and January 2022 and collected answers from 421 individual investors — the report did not specify whether participants used multiple types of storage.
The popularity of self-custodial hot wallets reflects community sentiment following the FTX debacle. However, the preference rate for wallets tied to centralized exchanges remains high.
The report justifies this ratio by saying it is related to the current dominance of centralized exchanges (CEXs) over decentralized exchanges.
“Most cryptocurrency holders still rely on centralized exchanges to enter and exit and buy and sell cryptocurrencies, so holders prioritize convenience over security,” the report states.
Regarding respondents who prefer cold storage of cryptocurrencies, the report noted that the percentage is not high enough to indicate a change in community sentiment.
Self-custodial wallet
CryptoSlate research from November 2022 shows that the FTX crash pushed Bitcoin (BTC) reserves into self-custodial wallets. In November 2022, the number of BTC in self-custodial wallets was close to 15 million, accounting for 78% of the circulating supply at the time.
The FTX collapse also prompted cryptocurrency organizations to turn to self-custody services. Cryptocurrency trading platform Robinhood began developing its own self-custody wallet in December 2022 and launched it in January.
Additionally, crypto company Juno publicly advised its users in January to switch to self-custody or sell their crypto assets. The company wrote on its official Twitter account:
“We strongly recommend withdrawing crypto assets to your self-custody wallet or selling your crypto for cash in your Juno checking account…”
During the same period, the shift toward self-custody also increased the use of cold storage. Data from December 2022 shows that 450,000 BTC that was stored on exchanges or in hot wallets before 2022 was moved to cold storage throughout the year.