Crypto crash, crypto crash, crypto crash.
You’re probably sick of hearing about it.
Seriously, the current dip – which, to be sure, is a pretty hefty dip (buy the dip!) – is being aired out ad nauseum, primarily as a way to deflect mainstream attention from the current DJIA bloodbath.
But no matter where you’ve been hearing about it, the point is that you’ve been hearing about it.
So, we’re going to spare you any further “crypto crash” discussion. We’re also going to remind you just one more time – we promise! – to buy the dip. So, you know, buy the dip.
With that out of the way, there’s another potentially more important lesson to learn from all this.
Now, if your main takeaway from the last week or two has been to stay away from crypto altogether and forever, there’s nothing we can say or do to help you fix your pauperized worldview.
You’re doomed, so you might as well enjoy it.
But if you’re actually going to take advantage of the current Bitcoin prices, Ethereum prices, Cardano prices, Solana prices, etc. to finally get off the fence and hop on the crypto bandwagon, then welcome aboard!
Anyway, here’s the lesson:
Once you buy your crypto – and once you’ve sent it (or a portion of it) to your legal sports betting sites of choice – get it off the exchanges.
We go out of our way to mention this on every crypto betting banking review, but frankly, we should probably include this tidbit way higher up each page. It’s that important.
When you keep your purchased crypto coins on the exchange where you bought them, you’re taking an unnecessary risk. While gambling is all about risk – and while crypto sports betting and crypto investing are both forms of gambling and are thus inherently risky – there’s a limit to how fast and loose successful bettors are when it comes to the risks they’re willing to take.
With crypto, the main thing is to heed the old adage:
“Not your keys, not your coins.”
Seriously, there is absolutely no more important concept in crypto trading and crypto investing than this.
If you learn nothing else about crypto – if you fancy yourself the most lay of laymen and insist on remaining blissfully unaware of the irrelevant underpinnings of this crypto platform or that crypto platform (yo!) – as long as you take this one piece of advice to heart and make it your mantra, you will do fine.
Better than fine.
Better than better than fine.
“Not your keys, not your coins.”
See, when you purchase crypto on a regulated commercial exchange – which we definitely recommend (our current favorite is Coinbase Pro, but it’s by no means the only exchange we use) – those exchanges transfer your new cryptos to their own system-side wallets.
You can leave your coins in your exchange wallets, and you can send coins from and receive coins to those wallets. Many exchanges even support staking for the most popular PoS cryptocurrencies like Cardano and Solana.
However, when you do this, the exchange is in control of your keys. That is, the exchange has full access to your wallet and everything in it.
In practice, when times are good, all that means is this: If you lose your user or login information for your exchange, you can kick off a simple account recovery, change your password, and log back in.
However, this is only possible because your exchange has custody of your crypto keys. These kinds of wallets are thus known as “custodial wallets.”
If something happens to your exchange – if it shuts down for an hour or a day or gets popped by the SEC or experiences network outages or its CEO pulls the plug and skips town with all the servers – you’re SOL.
The bad kind of SOL.
On the other hand, if you move your crypto off the exchanges ASAP to a private non-custodial wallet, none of that can happen.
Non-custodial wallets are crypto wallets where no third party has control over your assets or access to your assets. You own your crypto keys, and you own your crypto. Full stop.
These kinds of wallets exist as instances on their requisite coins’ blockchains, and only you have the means to get into your wallet and initiate transfers in and out.
Such wallets can be accessed on nearly any computer system, as you initiate wallet instances using a lengthy passphrase. In most cases, the phrase isn’t really a “phrase” per se – it’s really just a series of 12-15 unrelated words you must enter – in order – to gain access to your holdings.
While not 100% impervious to all conceivable crypto attacks, these kinds of wallets are much more resilient and resistant to most forms of interference and electronic maliciousness.
For added security, you can toss up a layer of hardware protection in between your crypto and the Internet, too. You do this by using a crypto hardware wallet made by companies like Ledger and Trezor.
But whether you go the software wallet or hardware wallet route (avoid crypto paper wallets, please!), you’ll definitely need to go one of these routes.
Otherwise, this could happen.
See, when you don’t have your crypto literally in hand – when it’s in someone else’s hand – there are plenty of opportunities for shenanigans.
Remember the GameStop Robinhood app debacle? Well, this is that for Bitcoin.
Now, to be clear: In order to actually withdraw your crypto to USD (or CAD or GPB or whatever funny money you prefer), you will most likely have to go through an exchange.
There are decentralized alternatives for some crypto cashouts, but in general, the exchange bottleneck – or, rather, the exchange chokepoint – does exist. It’s part of the game.
But the question that remains unanswered as of 2022 is how far that game can go.
A few hours of suspended BTC withdrawals is one thing. But what if your exchange stops all transfers? What if it stops all trading?
Bear in mind: Exchanges are fundamentally centralized. And that means it’s your job to decentralize your crypto as much as possible.