For first-timers and cryptocurrency enthusiasts alike, “HODL” means something greater than a simple, silly misspelling. It’s more than just a phrase – it represents a strong philosophy. It marks a new commitment of sorts, one that suggests a willingness to hold long-term crypto assets despite market fluctuations. This approach takes not only extreme patience, but a strong knowledge of how to properly and securely store such coveted digital assets. Whether custodial or more commonly non-custodial, crypto wallets are vital instruments for this endeavor. They give everyday people the tools they need to be the best and most engaged investors.

Trusting a crypto wallet for many years is much more than just having a product recommendation. It reflects a serious commitment to moving beyond risk management to proactively manage and protect irreplaceable digital resources. Bitcoin’s price has increased from a mere $0.0009 when it started in 2009 to close to $90,000 today. This nearly six-fold increase serves as a clear reminder of the urgent need for safe storage. And as long-term investors continue to buy and hold, the need for self-custody through crypto wallets only grows in importance.

Bitcoin's Illiquid Supply Surges Past 14 Million BTC

Perhaps the most influential story within the Bitcoin community is that of its illiquid supply. Unmoved supply This is the percentage of Bitcoin that’s been held in wallet addresses with no or very few outgoing transactions. It implies that holders have no intention of selling their assets in the near future.

Overview of Bitcoin's Illiquid Supply

Based on the recent data, we can ascertain that the illiquid supply of Bitcoin has now made up over 14 million BTC. This milestone underscores the growing conviction among investors that Bitcoin is not just a speculative asset, but a store of value worthy of long-term accumulation. These “hodlers” are taking coins out of active circulation, making each remaining one slightly more valuable with every coin taken out of circulation due to scarcity.

Implications of the HODL Trend

The rise in illiquid supply has a number of key ramifications. Here’s why this is important. First, by equal amounts, it decreases supply of Bitcoin on exchanges. This can lead to greater price inelasticity and upward pressure during peak demand periods. Second, it signals a shift in investor sentiment towards long-term holding, reflecting a more mature and confident market. In doing so, it bolsters the narrative that Bitcoin is a digital gold-like scarce asset. This positive perception can help attract and keep more investments from both retail and especially institutional investors.

Michael Saylor's Perspective on Cash Value

The founder of MicroStrategy and celebrity cryptocurrency booster, Michael Saylor, is a Bitcoin maximalist. At the same time, he has been outspoken against the depreciating value of cash in today’s economy. His pro-Bitcoin view provides a persuasive case for breaking the diversification mould in favour of asset classes such as Bitcoin.

The Risks of Holding Cash in Today's Economy

In a nutshell, Saylor contends that holding most of your wealth in cash is a fool’s errand since inflation eats away at its value. Inflation consistently chips away at the purchasing power of assets held in cash. Consequently, the same protected-for-dollar will buy less total goods and services in the years to come. It’s crucial, particularly in this moment. Governments around the world are pouring money into the system to help recover from the ravages of COVID-19, which adds to inflationary pressures.

Saylor's Insights on Bitcoin as a Hedge

According to Saylor, Bitcoin is the better option compared to holding cash. In the process, he advocates for its protection against inflation and currency devaluation. Bitcoin’s supply is capped at 21 million coins, meaning it can’t be printed into oblivion like fiat currencies. This absolute scarcity, along with rising adoption, creates an overall long-term bullish tendency that Bitcoin will serve as a store of value against inflation.

Limitations of Gold and Equities for Wealth Preservation

Gold and equities have been seen for a long time as safe havens for emergency wealth preservation. They have their drawbacks which makes Bitcoin an attractive bitcoin alternative for various investors.

Historical Performance of Gold and Equities

Gold has been a reliable store of value throughout history. What’s worse is its price performance compared to Bitcoin’s exceptional returns. Equities, while providing superior return potential, come with greater exposure to market volatility and economic cycles. It’s true that government policies, geopolitical events, and other factors can affect both assets. The problem comes from these influences, which are often beyond the control of individual investors.

Why Investors Are Turning to Bitcoin

Meanwhile, institutional investors continue to flood into the space as they increasingly seek out Bitcoin. Its unique combination of scarcity, decentralization, and high growth potential makes it an attractive option. Unlike gold, Bitcoin is readily verifiable and transferable, making it far more practical for digital commerce. Bitcoin is an asset that is distinct from equities. It’s not tied to the fortunes of any one country or economy, which can help it be a more resilient store of value, especially in turbulent times.

The Role of Bitcoin's Fixed Supply and Network Structure

Bitcoin’s immutable supply cap and its decentralized consensus network architecture are the twin pillars that supercharge its appeal. These qualities happen to make it an extremely attractive long-term investment.

Understanding Bitcoin's Supply Cap

The wide adoption of bitcoin’s 21 million coin fixed supply is a critical part of its value proposition. This artificial skimming is built into the Bitcoin protocol and can only be altered if the network reaches a consensus to do so. This ensures that Bitcoin will never be subject to runaway inflation. As such, it will not be subject to the same value-degrading inflation of fiat currencies.

How Network Design Influences Investor Confidence

A third important feature that undergirds investor confidence in BTC is its decentralized network structure. Today, this network extends through tens of thousands of nodes over a planetary scale. This architecture both makes it resilient against censorship and removes single points of failure. Decentralization makes it impossible for any one institution—government, corporation, or other—to rig or game the Bitcoin network for their own benefit. This capability significantly increases its attractiveness as a long-term store of value.

Long-term crypto investors – commonly referred to as HODLers – focus on self-custody via crypto wallets. These wallets come in two main types: custodial and non-custodial. A third party, such as a cryptocurrency exchange, controls custodial wallets. They hold the private keys on your behalf, which is how they are able to keep your assets secure. Although convenient, this can be a serious security pitfall.

Non-custodial wallets allow users full ownership of their private keys. This effectively leaves the user on the hook for any losses incurred due to the insecurity of their funds. Though this can be more technically demanding, it provides a much stronger level of security and peace of mind. Within the realm of non-custodial wallets, there are two main subcategories: hot wallets and cold wallets. Hot wallets allow easy access to cryptocurrencies since they’re always connected to the internet, which makes them less secure and more prone to hacks. Cold wallets remain offline, making them even more secure. This adds to their advantage of being a much safer long-term storage option.

Looking at how they guard against most use-case scenarios will help you know why long-term cold wallets are the safest place to store crypto for the long game. Preventing loss One of the best cold wallets available today is Material Bitcoin, Coldcard MK4, D’Cent Wallet, Arculus, and Ballet Wallet. These devices typically range from $100 to $200, with actual price points as low as $39 and as high as $157.94.

Here’s a closer look at some of the top cold wallet options:

  • Material Bitcoin: This offers a unique, non-electronic cold storage device.
  • Coldcard MK4: Known for its advanced security features and air-gapped operation.
  • D’Cent Wallet: A hardware wallet with biometric authentication for added security.
  • Arculus: An NFC-enabled cold wallet, designed to “tap-to-transact” without needing cables or batteries to function or connect to your phone.
  • Ballet Wallet: This is a pre-generated, non-electronic hardware wallet that supports multiple cryptocurrencies with its Multi-Crypto feature.

The decision of what wallet type to use should be based on personal security requirements and level of technical knowledge. For users that value the highest level of security and want to store their crypto for the foreseeable future, a cold wallet is the best choice. Look for a trusted, well-reviewed wallet brand. Pay special attention to the installation and usage instructions/checklists to avoid any hiccups during use.

Securing private keys is paramount. Here are actionable steps to ensure their safety:

  1. Backup: Create multiple backups of your private keys and store them in physically separate locations.
  2. Encryption: Encrypt your backups with a strong password to protect them from unauthorized access.
  3. Offline Storage: Store your backups offline, such as on a USB drive or paper wallet, to prevent them from being compromised by online threats.
  4. Regular Audits: Regularly audit your security practices and update them as needed to stay ahead of potential threats.

The best solution for long-term crypto investors is to focus on self-custody. With proper key management and securing their private keys, users can have confidence in their investments knowing they alone control their digital wealth. Selecting a wallet to store cryptocurrency long term requires some serious consideration. While it may seem simple at first glance, this step is crucial for anyone looking to HODL hard and provide themselves with a prosperous future.

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