What is a Bitcoin wallet and how to choose the best one

A Bitcoin wallet is your gateway to storing, sending and managing BTC. This guide shows you how Bitcoin wallets work, the different types available and how to choose one that fits your wants and needs, including how to set up a wallet on Crypto.com.

What is a Bitcoin wallet and how does it work?

A Bitcoin wallet is a digital tool that allows you to store, send and receive Bitcoin (BTC) securely. Instead of holding BTC directly, a wallet manages the private keys that proves asset ownership on the blockchain.

If you’re new to Bitcoin or crypto wallets, a private key is a secret code; think of it as your bank account’s PIN number, it should never be revealed.

Your public address is what you share when someone wants to send you crypto.

There are two main ways wallets handle private keys:

• Custodial wallets hold your keys for you. It feels similar to a traditional online account.
• Non-custodial wallets let you control your own keys. This gives you full self-custody, along with the responsibility of securely managing backups like your seed phrase*.

Bitcoin wallets don’t store coins locally. Instead, they connect to the Bitcoin blockchain. When you send BTC, your wallet authorizes the transaction, broadcasts it to the network and miners confirm it on the blockchain.

Wallets can be software-based (like mobile apps or web browser extensions), hardware devices or even offline tools.

Types of Bitcoin wallets

Bitcoin wallets come in different formats, each offering different levels of convenience, security and control. Understanding these options can help you choose the best Bitcoin wallet for your lifestyle and experience level.

1. Web Bitcoin wallets

Web wallets run inside your browser or online account. They’re easy to access from any device. Because the service provider manages much of the security, web wallets are considered convenient but require trust in the platform.

Platforms like the Crypto.com App and web experience give users a managed environment for holding and transferring BTC, with features like multi-factor authentication, address whitelisting and seamless on-and-off ramp methods.

2. Desktop Bitcoin wallets

Desktop wallets are applications installed on your computer. They offer higher control because your private keys remain stored locally.

However, desktop wallets depend heavily on the security of the device itself. Malware, outdated operating systems or compromised downloads can put your BTC storage at risk.

Some desktop wallets, like Bitcoin Core, also require substantial disk space because they run a full version of the Bitcoin blockchain.

3. Mobile Bitcoin wallets

Mobile wallets are the most widely used because they can fit into everyday routines. They allow you to manage your transactions on the go.

The Crypto.com App is an example of a mobile-first crypto wallet designed for daily use. It combines convenience with strong security, including biometric login, anti-phishing measures and encrypted private key management. 

4. Hardware Bitcoin wallets

Hardware wallets are physical devices that store your private keys offline, making them one of the more secure ways to hold Bitcoin. Because the keys never touch the internet, they’re highly resistant to hacking attempts.

While secure, hardware wallets can be expensive and less convenient for quick transactions. 

Using them also requires comfort with managing seed phrases and backups. They tend to be preferred by long-term holders or those managing larger BTC amounts.

5. Paper Bitcoin wallets

A paper wallet stores your public address and private key printed on paper. This approach removes the digital attack surface entirely, but it comes with significant drawbacks. Paper can be lost, damaged or misprinted; many modern wallet tools no longer support paper-based workflows.

Although paper wallets played a larger role in Bitcoin’s early days, they’re now considered outdated. Still, they illustrate the concept of offline Bitcoin storage and the importance of safeguarding private keys.

Custodial vs non-custodial Bitcoin wallets

Bitcoin wallets fall into two broad categories: custodial and non-custodial. The difference lies in who controls the private keys.

Custodial wallets hold your keys on your behalf. For many beginners, there is less pressure around managing seed phrases or backups.

Non-custodial wallets give you full control. Your private keys stay on your device and only you can sign transactions. This is what people mean when they talk about ‘self-custody’. It’s empowering, but it also means losing your seed phrase could mean losing access to your digital assets permanently.

Both wallet types connect to the Bitcoin blockchain the same way. The real difference is the responsibility model: whether you want a platform to help safeguard your keys or prefer complete control.

Crypto.com supports both approaches.

• The Crypto.com App offers a custodial experience suitable for everyday use, with protections like biometric login, 2FA and address whitelisting.
• Crypto.com Onchain is a self-custodial wallet where you manage your private keys directly.

It’s not uncommon for users to have a mix of both: a custodial wallet for convenience and a non-custodial wallet for long-term digital asset custody.

How seasoned users usually choose the best Bitcoin wallet

There isn’t a single ‘best Bitcoin wallet’ for everyone. The right choice depends on how you plan to use BTC and how comfortable you’re managing your own keys.

1. Security features

Look for wallets that support biometrics, two-factor authentication (2FA), encryption and optional withdrawal protections. If you choose a non-custodial wallet, make sure it provides clear guidance on seed phrase backups and private key recovery.

2. How easy it is to start or use

Clean navigation, clear transaction prompts and helpful support articles can make a difference, especially for first-time users. 

3. Backup and recovery

Every wallet should offer a safe way to recover access if something goes wrong. Custodial wallets typically handle this for you through account verification. Non-custodial wallets require you to store a seed phrase – usually a string of 12 or 24 words – which acts as the master key to your funds.

4. Compatibility

Your wallet should work well with exchanges and services you plan to use, whether that’s buying BTC, paying with a credit card or transferring BTC between wallets. Not all wallets support every network or asset, so always check compatibility before sending crypto.

5. Reputation and support

Choosing a trusted provider reduces risk. Look for established services with a clear security track record, responsive support and transparent documentation. Customer reviews and ratings may also be telling.

How to create a Bitcoin wallet on Crypto.com

Creating a Bitcoin wallet on Crypto.com takes only a few minutes. The app gives you a ready-to-use custodial BTC wallet and you can also opt into Crypto.com Onchain if you prefer full self-custody.

Step 1: Download the Crypto.com App

The app is available on both iOS and Android. 

Once installed, open the app and tap ‘Create New Account’.

Step 2: Sign up and verify your account

Enter your email, set a secure password and complete identity verification. Verification unlocks higher limits, fiat deposits and other key transactional features.

Step 3: Access your Bitcoin wallet

Inside the App, go to: 

You’ll see your BTC address, transaction history and options to ‘Buy’, ‘Send’, or ‘Receive’ Bitcoin.

Step 4: Buy or deposit BTC

You can add BTC in two ways:

1. Buy BTC using a bank transfer, debit or credit card and Apple or Google Pay.
2. Deposit BTC from another wallet by copying your BTC address and sending funds to it.

Funds typically appear after the required blockchain confirmations.

Ready to start your Bitcoin journey?

• Deposit funds via bank transfer, debit or credit card, or Apple or Google Pay
• Access your Bitcoin wallet instantly
• Buy and manage Bitcoin 

Sign up for a free Crypto.com account 

How to withdraw BTC to your bank account

If you want to cash out BTC, you first convert BTC to fiat inside the App, then withdraw the funds to your linked bank account.

1. Sell BTC for fiat currency

Go to ‘Accounts’ → ‘Crypto Wallet’ → ‘Bitcoin’ → ‘Sell’.

Choose your fiat currency (e.g., USD, GBR, EUR) and confirm the sale. The proceeds appear in your fiat wallet.

2. Select your withdrawal method

Open your ‘Fiat Wallet’, tap ‘Transfer’ and choose ‘Withdraw’. 

Supported options vary by region but commonly include bank transfer or ACH.

3. Link your bank account

If it’s your first withdrawal, follow the prompts to add your bank details. Verified accounts typically enjoy faster processing and higher limits.

4. Complete the withdrawal

Enter the withdrawal amount and confirm. The App displays the estimated arrival time and any applicable banking fees. 

You can track the transaction in real time under ‘Fiat Wallet’ → ‘Transfer History’.

How to transfer BTC to Crypto.com Onchain

If you want to keep long-term holdings in self-custody while still using the Crypto.com App for buying or managing assets, you can easily move BTC between the two.

Here’s how the transfer works:

1. Set up Crypto.com Onchain

Open the app, go to ‘Onchain’ and follow the prompts to create your self-custodial wallet. You’ll be shown a seed phrase – write it down and store it safely. This seed phrase is the only way to recover your Onchain wallet.

2. Find your Onchain Bitcoin address

Inside Onchain, select ‘Bitcoin (BTC)’ to view your BTC address. 

On Bitcoin mainnet, wallet addresses typically start with 1, 3, bc1, or bc1p, depending on whether they’re legacy, P2SH, SegWit or Taproot formats.

Tap ‘Receive’ to copy the address or show the QR code.

3. Send BTC from your Crypto.com App wallet

Go back to your custodial BTC wallet in the main Crypto.com App, tap ‘Send’ and paste your Onchain BTC address. 

Review the network, withdrawal fee and any limits shown in the app. Once you confirm, the transaction broadcasts to the Bitcoin network.

4. Wait for confirmations

Because this is an on-chain transfer, it needs the usual Bitcoin confirmations before appearing in your Onchain wallet. You can track progress through the ‘TxHash’ function in the App.

Bitcoin wallet safety tips

FAQs about Bitcoin wallets

What is the difference between a Bitcoin wallet and a Bitcoin account?

A Bitcoin wallet holds the keys that let you access and move your BTC. A Bitcoin ‘account’ usually refers to a custodial service – like the Crypto.com App – where the platform manages those keys for you. Both let you send and receive BTC and other crypto, but the responsibility model is different.

Can I use the same Bitcoin wallet for Ether or other coins?

No. Bitcoin runs on its own blockchain, so BTC addresses aren’t compatible with ETH or other networks. Most wallets can hold multiple assets, but each asset still has its own unique address format. Always double-check before sending.

Is Crypto.com a custodial or non-custodial wallet?

Crypto.com offers both. The Crypto.com App is a custodial wallet where the platform safeguards your keys. Crypto.com Onchain is non-custodial, meaning you hold your own keys and seed phrases*. You can choose the model that fits your day-to-day usage habits and comfort level.

How do I transfer BTC from another wallet to Crypto.com?

Find your BTC address in the Crypto.com App under ‘Accounts’ → ‘Crypto Wallet’ → ‘Bitcoin’, then copy it and paste it into the sending wallet. 

Send a small test amount if you’re unsure. Once the required confirmations go through, your BTC appears in the app.

How long does it take to withdraw BTC to my bank account?

It depends on your region and banking method. First, you sell BTC for fiat in the App. Bank transfers usually take anywhere from minutes to a few business days, depending on your bank’s processing times and public holidays. The App shows an estimated arrival window before you submit the withdrawal.

What happens if I lose my wallet’s seed phrase?

For non-custodial wallets, losing the seed phrase* normally means losing access to your funds permanently – it’s the one backup that can restore your wallet. Custodial wallets work differently: You can recover access through account verification, similar to resetting a password.

Are Bitcoin wallets anonymous?

They’re pseudonymous, not fully anonymous. Your public address doesn’t show your name, but your transactions are recorded on a transparent blockchain. If you use a custodial service, identity verification may also link your activity to your account for compliance purposes.

What’s the difference between a Bitcoin wallet and a crypto wallet?

A Bitcoin wallet is used specifically for storing and sending BTC, while a crypto wallet can hold multiple assets across different blockchains. In practice, most modern wallets support BTC alongside a wide range of other cryptocurrencies. The key is that each asset still uses its own network and address format.

* A seed phrase is a critical key to accessing certain cryptocurrency wallets. 

Important information: This is informational content sponsored by Crypto.com and should not be treated as investment advice. Trading cryptocurrencies carries risks, such as price volatility and market risks. Past performance may not indicate future results. There’s no assurance of future profitability. Before deciding to trade cryptocurrencies, consider your risk appetite. If you use a non-custodial wallet, you are responsible for securely storing your seed phrase. Losing it may result in loss of access to your assets.

Services, features and other benefits referenced in this article may be subject to eligibility requirements, token holdings, and may change at the discretion of Crypto.com.