1. Your Bitcoin Is Truly Safe

Self-custody offers the highest level of security and peace of mind. It helps you avoid the risk of losing your Bitcoin through hacks or questionable exchanges. When your Bitcoin is stored in cold storage, it stays offline and protected from potential threats. There have been many cases where exchanges have been hacked, resulting in millions of users losing their funds.

Your recovery phrase should never touch a device that’s connected to the internet. This is why hardware wallets are used to generate your 12 or 24 words, and backup solutions like Steel Backups are recommended.

2. Full Control Over Your Bitcoin

With self-custody, you have complete control over your Bitcoin. You’re no longer relying on a third party to secure your funds, which can lead to risks such as hacks, frozen accounts, or sudden closures. Self-custody means no one can restrict, seize, or interfere with your assets. You’re the only one who has access to your money.

Bitcoin is one of the few assets you can truly self-custody. Other examples are gold and silver. However, stocks and bonds can’t be self-custodied at all. Just like keeping cash under the mattress in the old days, you can now store your wealth with true independence.

Tip: Storing a steel backup under your pillow might not be the best method if you value your sleep. 😜

3. Why Self-Custody Is the Best Choice

You Learn How Bitcoin Works

Setting up your own cold storage wallet is more than just a security measure; it also helps you understand Bitcoin better. With user-friendly hardware wallets like the Foundation Passport or BitBox02, even those who aren’t tech-savvy can develop a deeper understanding of Bitcoin. Having the necessary know-how is always crucial in an emergency.

Prevent Market Manipulation

Exchanges sometimes engage in shady practices with their users’ Bitcoin. By storing your Bitcoin yourself, you prevent exchanges from using your assets for manipulative trading practices, contributing to a more transparent and stable market.

Regulatory Rules Can’t Take Your Bitcoin Away

Bitcoin is still relatively new, and regulators are uncertain about how to classify it. For instance, in Germany, cryptocurrencies are treated as private assets under the Income Tax Act, rather than explicitly as “currencies.” This means things could change in the future. Since the regulatory landscape is constantly evolving, self-custody ensures that your Bitcoin stays under your control. Even if regulations tighten, cold storage allows you to manage your assets without outside interference. While regulations might still apply to you, knowing that you’re the only one who can move your Bitcoin provides peace of mind.