Introduction
There are many different types of crypto wallets, which we can break down into subgroups like hot wallets (online applications) and cold wallets (offline, typically hardware). Yet, another way we can categorize wallets is non-custodial and custodial. The former is the most frequently used type of crypto wallet. A non-custodial wallet means that you have control of your private keys and management of your wallet is not given over to a 3rd party. Indeed, it taps into the mantra of the crypto movement – “Be your own bank.”
A non-custodial wallet puts you in control of the management of your crypto security credentials, such as private keys. A custodial wallet, as you might expect, is one where your private keys are managed by a 3rd party. There is often debate over the benefits of non-custodial vs. custodial wallets, but non-custodial is by far the more popular option. The vast majority of major crypto cold and hot wallet brands – MetaMask, Trust Wallet, Coinbase Wallet, Trezor, Ledger – offer non-custodial wallets.
With a non-custodial wallet, you are in control of your security. Your crypto cannot be accessed by a 3rd-party. That’s the attraction of a non-custodial wallet. The downside is that you have limited options for recovery should you lose access to your wallet and seed phrases. That said, it is not the case that you are completely on your own. The best non-custodial wallet companies will have dedicated customer support teams and educational resources to help you manage your non-custodial wallet securely.
Advantages of Non-Custodial Wallets
The crypto movement, in essence, is about moving away from traditional financial institutions like banks and putting asset management in the hands of people. That principle is built into the concept of non-custodial wallets:
The advantages of custodial wallets include:
Full Control. You are your own bank, having control of your digital assets. Only you can access your private keys and seed phrase.
Increased Security. There is no reliance on 3rd parties like exchanges. Your crypto would be safe even if, for example, the wallet provider company went bankrupt.
Privacy & Anonymity. Many non-custodial wallets do not require KYC (Know Your Customer) verification. For example, some, like Phantom Wallet, require no name, email, or phone number to set up.
Features to Look for in a Non-Custodial Wallet
Our wallet reviews and rankings consider numerous factors to showcase the most trusted and secure self-custody wallets. Areas we examine include:
Security
Encryption: How the wallet encrypts your data (AES 256 encryption, etc.).
Backup & Recovery: Tools provided for restoring your wallet, including seed phrase policies.
Additional Security: Options for additional protections, such as 2FA and biometrics.
Security Reputation: The wallet provider’s reputation for security, including any data breaches or major security incidents.
Private Key Management
Self-Custody Options: Tools and resources offered to help you manage your private keys securely.
Customer Service: Support options offered by the wallet provider to help you manage your wallet securely.
Multi-Chain Support
Multiple Cryptocurrencies: Does the wallet support a single type of asset, like Bitcoin, or can you store multiple types of digital assets?
User Experience
Ease of Use: The wallet’s interface and accessibility.
Transaction Management: Speed of transaction, options for fee customization.
dApp & DeFi Integration
Staking: Does the non-custodial wallet offer staking options.
Exchange integration: Does the wallet have compatibility with centralized exchanges (CEXs) or decentralized exchanges (DEXs).
dApps and DeFi: Wider integration with web3 products.
Types of Non-Custodial Wallets
We can divide non-custodial wallets into two main categories: hot wallets and cold wallets. Hot wallets are applications, such as mobile apps, desktop applications, or browser extensions. Cold wallets, on the other hand, store your private keys offline. They are most commonly hardware.
Non–Custodial Hot Wallets
Best for day-to-day transactions and those who require convenient access to their crypto, such as traders.
Examples of major non-custodial hot wallets include MetaMask, Trust Wallet, Coinbase Wallet, and Phantom.
Non-Custodial Cold Wallets
Best for long-term crypto storage and those who have high-value digital assets.
Popular non-custodial cold wallets include the Ledger Nano X, Trezor Model T, Keystone Pro, and SafePal S1.
Best Non-Custodial Wallets By User Needs
Best Non-Custodial Wallets for Beginners
Trust Wallet: A massively popular multi-coin wallet owned by the Binance exchange. Trust Wallet is easy to use, integrates with Binance Pay, and has its own proprietary token (TWT).
Exodus Wallet: Exodus is known for its user-friendliness. Store a wide range of cryptos from different blockchains. Swap your crypto in-wallet with the integrated exchange feature.
Best Non-Custodial Wallets for Advanced Users
MetaMask: A wallet built for Ethereum and chains that connect with its ecosystem, MetaMask is considered one of the best wallets for DeFi and Web3.
Ledger Nano X: One of the leading crypto hardware wallets, the Ledger Nano X offers robust security for long-term cold storage. Additional functionality is provided with the companion Ledger Live App.
Best Non-Custodial Wallets for Defi and Web3
Phantom: The Phantom wallet is promoted as a web3 companion. It is particularly noted for its functionality within the Solana blockchain’s expanded world of NFTs, meme coins, and DeFi products.
Argent: Built for the Ethereum Layer 2 Starknet chain, Argent offers low fees for buying, swapping, and staking tokens. It has compatibility with a wide range of dApps in the growing Starknet ecosystem.
Scores & Rankings
Our crypto wallet ranking and review system will pinpoint the best non-custodial crypto storage options, as well as further insight on how to use a non-custodial wallet safely. To augment our analysis, we provide information from third-party review sites. These include ratings and reviews from Trustpilot, the App Store & Google Play. Additionally, our in-house expertise will highlight Editor’s Picks, showcasing the best crypto non-custodial wallets for Bitcoin, Ethereum, altcoins, and other digital assets like NFTs.
FAQs
What is a non-custodial wallet, and how does it work?
A non-custodial wallet is a method for managing your cryptoassets. As a non-custodial wallet, only you have access to sensitive information like private keys and seed phrases. The wallets can be hot (applications connected to the web) or cold (offline storage, usually in hardware).
How do I secure my non-custodial wallet?
There are numerous steps that can be taken to secure your non-custodial wallet. Depending on the wallet, you can complement the wallet’s encryption and built-in security with additional measures like 2FA and biometric security. Bolster your non-custodial crypto wallet security by following best crypto security practices, avoiding unknown links, only using official platforms, and so on.
Can I recover my funds if I lose my private keys?
Yes. Crypto wallet holders are provided with a seed phrase crypto recovery option on activating their non-custodial wallet. This is usually in the form of a 12 or 24-word phrase. This restores access to your wallet’s private keys. However, should you lose access to your wallet/private keys and seed phrase, it is likely that you will not be able to recover your crypto.
Are non-custodial wallets safe for beginners?
Yes. However, it is important that new crypto holders educate themselves on non-custodial wallet security practices. This includes storing the seed phrase safely and being aware of scams like phishing campaigns that may compromise your wallet. The best non-custodial wallet providers will offer customer support and resources to help keep your crypto safe.
Which non-custodial wallets support staking and DeFi?
Numerous non-custodial wallets support staking and DeFi integrations. These include MetaMask, Trust Wallet, Coinbase Wallet. Even those wallets that do not offer native staking may offer integrations with 3rd party staking platforms. Often, non-custodial hardware wallets will offer staking through companion apps.