Is it safe to keep crypto on an exchange, or should you move it to a wallet?
Is it safe to keep your crypto on an exchange? Honestly, it depends on what that money is for, and once you split it by job the answer gets a lot simpler.
Short answer: an exchange is fine for the amount you're actively trading. It's not a great home for coins you plan to hold for years.
What you're trusting when it sits on an exchange
When your crypto is on an exchange, the exchange holds the keys. You're trusting three things:
Their security. If they get hacked, your coins are part of what got hit.
Their withdrawal policy. They can pause withdrawals, and when that happens you wait.
Their balance sheet. If the company goes under, you're in line with everyone else.
Most days none of that matters. The problem is the rare day it does. And crypto sitting on an exchange isn't FDIC insured like a bank account.
What changes when you hold the keys
A wallet where you control the keys flips the risk. Nobody can freeze it. But nobody can reset it for you either.
Lose the seed phrase, or type it into a fake support page, and it's gone for good. So self custody isn't automatically "safe." It just moves the responsibility onto you.
The split I actually use
It's boring on purpose:
On the exchange: only what I'm actively trading.
In my own wallet: long term bitcoin and anything I won't touch for months.
Seed phrase: on paper, somewhere safe. Never in a screenshot, a notes app or a cloud drive.
Before moving a bigger amount: send a small test first and wait until it shows up.
That's it. No fancy setup needed.
Why this matters for traders
If you trade futures, your trading balance has to live on the exchange anyway. That's fine. The point is to keep it sized to what you actually need for your trades, not your whole stack. A tidy trading balance also makes position sizing easier, which is a big part of what we go through in the Academy and in the Crypto Trading Bible.
Educational only, not financial advice. Just how I split mine.
Your turn: how do you split yours right now, mostly on exchanges or mostly in your own wallet? And have you ever had a withdrawal get stuck? Drop it in the comments. 👇
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