A recent survey conducted by Tangem and Protocol Theory sheds light on the fact that cryptocurrency traders back self-custody wallets over relying on exchanges and platforms that can be controlled by third parties. The traders included in the survey sought market protection from outsiders who can tamper with their investments. The study was conducted with 3,172 respondents, and the majority of them challenged the use of exchanges and trading platforms.

66% of crypto users believe self-custody is important, but only 15% actually use a hardware wallet, exposing one of the biggest adoption gaps in the cryptocurrency market. Around 32% responded that they don’t think hardware wallets are relevant to them. Also, hardware wallet holders are mostly into the market for long-term investments and rarely indulge in passive trading. However, they are among the ecosystem’s most active participants, trading, using DeFi, making payments, managing stablecoins, and interacting with Web3 directly from their wallets.

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Why is Self-Custody Growing in the Cryptocurrency Market?

Years of failures from exchanges are what’s leading cryptocurrency users towards self-custody wallets. The fall of FTX, scammers stealing funds from WazirX, and several other instances have eroded confidence in trading platforms. In addition, exchanges face routine regulatory scrutiny that can affect the way the platforms operate. The rising platform fees to initiate buy and sell options are also among the reasons traders back out from exchanges. Therefore, self-custody is now back in focus, as usage is seeing a rapid rise among the investor community.

Once people try self-custody, their attitudes shift dramatically as they feel they are in control of their money. It also gives them a sense of freedom that their investment is in their own safe hands. The cryptocurrency market keeps evolving every year, with investors’ choices shifting on a regular basis. There is no one-size-fits-all solution in the rapidly growing digital market industry.