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How to keep Bitcoin safe? Tips For Securing Your BTC

min read

Are you diving into the world of cryptocurrencies and wondering how you can keep Bitcoin safe? There are multiple storage options for you to secure your Bitcoin. The answer to that question will depend on your individual preference. Let’s dive into the different storage options available that will help you keep Bitcoin safe.

What is the best way to keep Bitcoin safe?

That depends on your individual preference. It is suggested that a cold wallet is one of the most secure ways to keep Bitcoin if you are a HODLer, as it keeps your BTC offline. A safer and more convenient way would be to keep your Bitcoin in Xapo Bank. Our technology, strong balance sheet and expertise from being the first institutional Bitcoin Custodian in the world put us in the best position to keep your BTC safe.

1. Bitcoin-enabled bank

Let’s cover some of the storage options available to keep Bitcoin safe. First, we have the innovative approach of Bitcoin-enabled bank Xapo Bank. This new type of bank aims to bridge the traditional finance world to the crypto ecosystem. As such, they act as crypto-to-fiat gateways, allowing users to connect the two seamlessly.

What makes Xapo Bank different from other Bitcoin storage options? We are fully regulated financial institutions and must comply with several regulations that ensure customer protection that are not found in hardware wallets or unregulated crypto exchanges. Therefore, Xapo Bank gives you access to services that enable you to make the most of your Bitcoin with innovative ways to spend and grow it in a fully regulated environment. In this sense, Xapo Bank gives you access to an alternative Bitcoin storage solution that offers unmatched security and simplicity when accessing your Bitcoin.

Bitcoin-enabled bank: pros and cons


  • Regulated entities: As a regulated financial institution, Xapo Bank is more secure than an exchange, which may not be regulated at all. On the contrary, Xapo Bank needs to comply with regulations that guarantee unmatched protection for customers and their funds.
  • Security: Xapo Bank is required by law to protect their customer funds. This means they will go the extra mile to implement the most robust security measures to achieve this.
  • Flexibility: Xapo Bank acts as a crypto-to-fiat gateway. In this sense, we are more flexible than a hardware wallet, allowing users to transact and grow their Bitcoin seamlessly.
  • Lower risks: Since Xapo Bank acts as a custodian for your funds, it eliminates the risk of you losing access to your funds, which could happen with hardware wallets.
  • Crypto-to-fiat gateway: Xapo Bank is a real-life bridge between traditional finance and crypto. They offer an easy way for users to exchange their crypto to fiat in a breeze.


  • Limited control: Xapo Bank acts as a custodian for your Bitcoin; you do not own your private keys.
  • Limited provider options: Xapo Bank is one of the few options for Bitcoin-enabled banking to choose from.

If you’re interested in discovering more about the first regulated Bitcoin-enabled bank that operates globally, have a look at Xapo Bank. Your Xapo Bank account lets you sleep at night knowing your Bitcoin is secured by top-tier security technology. At the same time, you enjoy unmatched Bitcoin payment flexibility that you couldn’t access with a hardware wallet. Plus, your Bitcoin wallet is linked to your USD bank account so that you can switch seamlessly between BTC and USD.

2. Hardware wallets

Another crypto storage option is hardware wallets. Hardware wallets are a form of cold storage for Bitcoin and cryptocurrency. It is essentially an external device – often resembling a USB stick. It lets you store and secure your Bitcoin offline without relying on a third-party custodian.

Many people in the crypto industry suggest that a crypto hardware wallet or cold storage is one of the most secure ways to keep Bitcoin safe. It’s interesting, especially for HODLer, as it keeps your Bitcoin offline and mitigates the risks of hacks. While hardware wallets seem to be an attractive storage option, they also have limitations, such as their complexity and limited flexibility. But, more importantly, they also represent significant risks of losing your funds. You have probably already come across some horror stories about keeping Bitcoin in self-custody. Many people think self-custody and hardware wallets are one of the safest ways to keep Bitcoin safe. Did you know that over $100 billion worth of Bitcoin has reportedly been lost to faulty self-custody practices? This number questions whether self-custody is the best way to secure your Bitcoin. So, are hardware wallets really one of the best ways to keep Bitcoin safe?

Hardware wallets: pros and cons


  • Advanced security: As hardware wallets are offline devices, they are significantly less prone to hacks
  • Complete control: Users own their private keys and have full ownership of their crypto


  • Complexity of use: Hardware offers less accessibility and flexibility for daily transactions
  • Loss of funds risks: As users are the sole persons responsible for their funds, they must be extra careful with their private keys. If users lose them, they may be unable to regain access to their funds.

3. Exchanges

Another standard Bitcoin storage option is crypto exchanges. Exchanges are online platforms on which you can store your Bitcoin. If you hold Bitcoin on an exchange, the exchange will custody the funds for you. As a result, this means that you will not be the owner of the private keys to the wallet. You can also access different crypto services, like trading, swapping, lending, etc.

Unlike hardware wallets, exchanges offer much more flexibility when it comes to using your Bitcoin. But, people often consider they are not that safe as you do not own the private key to the wallet. As the crypto community likes to say, not your keys, not your coins. The risks of storing Bitcoin on an exchange range from hacking to theft. But the exchange could also shut down or simply flee with their clients’ funds.

Crypto exchanges: pros and cons


  • Ease of use: Storing crypto on exchanges is relatively easy, and exchanges are very convenient for daily transactions
  • Flexibility: Crypto exchanges also offer additional crypto services besides custody.


  • Security risks: Storing funds online on exchanges means higher hacking or theft risks.
  • Limited control: Users do not own the private keys to their wallets.
comparison table of different storage options to keep Bitcoin safe

How does Xapo Bank keep Bitcoin safe for you?

The first important thing to note is that Xapo was originally one of the biggest Bitcoin custodians in the ecosystem. And now, we leverage our expertise and previous experience as the world’s first institutional Bitcoin custodian, which puts us in the best position to help you secure your Bitcoin. We reinforce this position further thanks to our technology and strong balance sheet.

Institutional-grade Bitcoin protection for your peace of mind:

  • Access to regulated banking and crypto services
  • MPC technology requires multiple coordinated parties to access your funds
  • Large Bitcoin reserves securing your funds
  • Biometrics verification, including fingerprints and face recognition
  • Two-factor authentication (2FA) to ensure you are the one accessing your account
  • Bitcoin Vault with extra security features and transfer delays

What is an MPC (multi-party computation) wallet?

What truly sets Xapo Bank’s security apart from other online crypto custodians’ is the MPC (multi-party computation) protocol we use for your Bitcoin wallets.

MPC is a cryptographic technology that splits the wallet’s Master Private Key into multiple distinct parts, or "key share". Xapo Bank then secures and distributes those shares across the globe at secret locations. That means no individual party within the quorum possesses full access to or control over the stored assets. Due to their decentralised design and dispersed private key fragments, hackers would face an overwhelming challenge when attempting to access any of these key shares simultaneously. Since the key shares are refreshed every few minutes, each key share would have to be compromised within a very short window of time at each location.

So essentially, MPC technology powers enhanced security through distributed trust. How is that? MPC wallets improve security by dividing trust among several participants, significantly decreasing the likelihood of the wallet being hit by hacks and cyber threats.

Apply for membership and experience the Xapo Bank security standard.

How do I keep my Bitcoin safe and secure my wallet?

Now that you know the different types of Bitcoin storage options, you might wonder, “How do I keep my Bitcoin wallet safe?

Knowing which type of wallet best suits your needs – whether an online wallet or hardware wallet – is insufficient to keep Bitcoin safe. You must also adopt some security best practices to keep your wallet safe.

Seven tips to secure your Bitcoin wallet

Find some tips below that will help you keep your wallet safe and secure your Bitcoin:

  1. Choose a secure wallet: Firstly, you should use a reputable and well-reviewed Bitcoin wallet. You can consider different types of wallets: desktop, mobile, web, hardware, and paper wallets.
  2. Use strong passwords: Then, you need to create a strong, unique password for your wallet. Use a mix of upper and lower case letters, numbers, and special characters. Avoid easily guessable information like birthdays or common words.
  3. Enable two-factor authentication (2FA): If your wallet provider offers 2FA, enable it. 2FA adds an extra layer of security. It requires a second authentication method, such as a mobile app or a hardware token.
  4. Beware of phishing and scams: Be cautious of phishing emails, websites, or social media messages that impersonate legitimate services. Always double-check URLs and never share your private keys or recovery phrases with anyone. Don’t hesitate to check out Xapo Bank’s blog for more security insights.
  5. Keep your software or app updated: Keep your wallet software or app and operating system updated with the latest security patches. Outdated software can be vulnerable to exploits.
  6. Use a secure internet network: Avoid accessing your wallet on public Wi-Fi networks. Use a trusted and secure internet connection when making transactions or checking your balance.
  7. Consider multisignature or MPC wallets: For more security, use multisignature wallets that require multiple private keys to authorise transactions. They make it more difficult for an attacker to gain control of your funds. You can also consider MPC wallets which are even more secure. MPC technology splits your wallet’s private key into three shards. They are held in different locations and prevent one single person from gaining access to your wallet.

What is the best app to buy, hold, and sell Bitcoin?

After understanding how to keep Bitcoin safe, you might want to learn how to buy and sell in Bitcoin**. And what are the most accessible and most secure apps to do that?

The Xapo Bank app is one of the fastest, most secure apps to give access to buying, holding and selling Bitcoin services. It’s also very convenient to exchange your Bitcoin for USD. The process is straightforward as your Bitcoin wallet and USD bank account are linked. Simply exchange BTC for USD with a few taps on the screen. Another plus is that you earn 4.6% interest on your USD deposits*. We pay interest out daily in Satoshis, so you can quickly grow your Bitcoin* with stable earnings.

How to use the Xapo Bank app to buy Bitcoin? You can easily exchange the USD that you hold in your Xapo Bank USD account for Bitcoin. Here’s how it’s done:

  • Tap Exchange on the Wallet tab
  • Specify the amount of Bitcoin you’d like to buy with your USD
  • Tap Continue and review the order
  • Confirm and find your newly exchanged Bitcoin in your Bitcoin wallet, earning you 1% annual interest.*

On the Xapo Bank app, you can also exchange Bitcoin for USD:

  • In your Wallet tab, tap Exchange
  • Enter the amount of Bitcoin to exchange for USD
  • Tap Continue and review the transaction
  • Tap Confirm. The exchanged USD will appear in your USD wallet and earn 4.6% annual interest.*

Do banks offer Bitcoin savings?

Usually, most traditional banks are reluctant to support cryptocurrencies. As a result, it might be tricky to find a bank that offers Bitcoin savings.

However, Xapo Bank is different. It merges the best of Bitcoin and traditional finance. We give you access to one of the most secure and rewarding Bitcoin savings products. It allows you to keep your Bitcoin safe and grow simultaneously. Your Bitcoin held with Xapo Bank earns you 1% annual interest, which we pay daily.* Plus, your Bitcoins are fully protected by our Bitcoin reserves, one of the largest in the world.

You worked hard for your Bitcoin. Now let it work for you in a secure place, stress-free. Join Xapo Bank and try it yourself.

How can I pay with my Bitcoin?

You can pay for various goods and services and even your bills with Bitcoin if the merchant accepts it. To do so, you would need to transfer Bitcoin from your wallet to the merchant wallet. However, this process might not be the most straightforward to pay with your Bitcoin. You would typically have to wait for your transaction to be confirmed. And also pay blockchain fees. It could result in a waste of time and money.

Luckily, you have several Bitcoin payment options at Xapo Bank. First, you can spend Bitcoin with your Xapo Bank debit card. It gives you even more flexibility to pay with Bitcoin, as your US Dollar and Bitcoin accounts can be linked. This means if you don’t have enough USD to make a card payment, the amount of the payment will be automatically converted from your BTC balance. The payment will be made even if the merchant does not directly accept BTC.

Second, you can make Bitcoin payments of up to $100 per transaction through our integration with the Lightning Network. This way, you skip the blockchain queue and fees so you can spend efficiently.

If you want to keep your Bitcoin safe and be able to access it easily anywhere at any time, you could open a Xapo Bank account.

Xapo Bank is a crypto-enabled bank licensed by the Gibraltar Financial Services Commission. We give our members access to a US Dollar and Bitcoin account, successfully bridging the gap between traditional banking and crypto. USDC deposits into Xapo are immediately converted to USD on a 1:1 basis, giving instant dollar cash value with zero exchange fees.


This article is for general information purposes only and is not intended to constitute legal or other professional advice or a recommendation of any kind whatsoever and should not be relied upon or treated as a substitute for specific advice relevant to particular circumstances. We make no warranties, representations or undertakings about any of the content of this article (including, without limitation, as to the quality, accuracy, completeness or fitness for any particular purpose of such content), or any content of any other material referred to or accessed by hyperlinks through this article. We make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.

* The Annual Interest Rate offered on both USD and Bitcoin deposits is variable and may change at any time. Please see our Interest FAQs for more information. Interest on Bitcoin deposits will only be paid on balances of 5 BTC or less. For more information, visit our Help Centre. Interest on both USD and BTC is currently paid in Satoshis. We may instead choose to pay it in any other supported currency or currencies (fiat and/or crypto) from time to time. 

** Capital at risk. This information is not investment advice. Crypto asset values can go up as well as down and you could lose all the money you invest. This is a high‑risk investment and you are not protected if it loses all or some of its value. Past performance is not indicative of future results.

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