Wallet

Also known as: crypto wallet, hot wallet, cold wallet

Software or hardware that stores the keys used to control crypto. Hot wallets are online; cold wallets are offline; custodial wallets are held by a third party.

Definition

A crypto wallet holds the private keys that control your assets, not the coins themselves. Hot wallets are connected to the internet (apps, browser extensions); cold wallets are offline (hardware devices), offering more security. A custodial wallet is controlled by a third party such as an exchange, while a non-custodial wallet is controlled only by you. For tax, moving crypto between your own wallets is not a disposal, but every wallet must be tracked to keep base cost complete.

Example

You keep trading funds in a hot exchange wallet and long-term holdings in a cold hardware wallet; transfers between them are not disposals.

See also