How to buy and store crypto: exchanges, hardware wallets and brokers compared

Owning crypto is less about which coin and more about where it sits. Since 2014, three of the best-known exchanges have collapsed with their customers' money inside, while coins held in the owner's own wallet were untouched. At the same time, regulated brokers and exchange-traded products now let investors hold Bitcoin next to their shares, with no wallet at all.

This guide compares the three routes: an account at a crypto exchange, your own hardware wallet, and a broker or ETF. It starts with what went wrong in the big failures, then sets out what to check for each route.

What the exchange failures teach

Sources: bankruptcy coverage of Mt. Gox (2014); OSC report on QuadrigaCX (2020); court records and coverage of the FTX case and repayment plan (2024–2025).

FTX's repayment shows the hidden cost: a customer who held one Bitcoin on FTX got back roughly $20,000 in 2025, at a time when one Bitcoin was worth several times that. The lesson behind the crypto saying "not your keys, not your coins" is easy to state: a balance on an exchange is a claim on the exchange, not a coin you control.

Route 1: an account at a crypto exchange

An exchange is the usual way in: you send euros or dollars, buy coins and can keep them in the account or withdraw them to your own wallet. What separates a sound exchange from a risky one can be checked:

• Regulation. In the EU, crypto firms now need a licence under the MiCA regulation; in the UK, registration with the FCA. Check the licence on the regulator's own register, not only on the exchange's website.
• Proof of reserves. Some exchanges publish regular evidence that customer coins are held 1:1, ideally in a form each client can check for their own balance.
• Track record. Hacks happen; what matters is whether customer funds were lost and how the exchange handled it.
• Fees. The "instant buy" button in exchange apps usually costs far more than the order book of the same exchange.

Sources: company disclosures and regulator announcements; press coverage of the incidents. Read 31 Oct 2026.

What fees look like in practice. On Kraken, the professional order book (Kraken Pro) charges 0.40 % for orders that wait in the book and 0.80 % for orders that fill immediately, at the lowest volume tier. The same purchase through the Kraken app's instant buy costs 1 % plus a spread built into the price. Bitpanda charges a broker fee of 0.99 % for Bitcoin and 1.49 % for most other coins. On a €10,000 purchase, the difference between 0.40 % and 1 % plus spread is €60 or more, every time. Fees change often; the exchange's own fee page is the only reliable source.

A note on Binance, the largest exchange by volume: in November 2023 it pleaded guilty to US federal charges over money laundering controls and sanctions and agreed to pay about $4.3 billion; its founder also pleaded guilty.

Route 2: your own hardware wallet

A hardware wallet is a small device that keeps the private keys to your coins offline. Transactions are confirmed on the device itself, so a hacked computer cannot move the coins without physical access. If the device is lost, the coins can be restored from the seed phrase: a list of 12 or 24 words from a fixed list of 2,048, created when the wallet is set up (the BIP39 standard). Whoever has those words has the coins.

Sources: trezor.io, ledger.com, shiftcrypto.ch and press coverage. Prices at launch or as listed by the maker.

The risks of self-custody are different, not absent:

• Buy only from the maker's own website (trezor.io, ledger.com, shiftcrypto.ch) or an authorised reseller. Fake lookalike sites for well-known wallets are common in search results.
• Never type the seed phrase into a phone, computer or website. No genuine support team will ask for it.
• Store the seed backup offline, in a second location, and test once with a small amount that a restore from the backup works.
• Plan for inheritance. Coins that only you can reach are lost to your family if they cannot find the backup.

Route 3: a broker or an exchange-traded product

For investors who want crypto exposure next to their shares and bonds, without wallets or crypto exchanges, two options exist.

Buying coins through a broker. Interactive Brokers, for example, offers direct crypto trading in the US, the UK and, since March 2026, the EU. Coins are held by regulated custodians (Paxos and Zero Hash in the US, Paxos in the UK, zerohash in the EU). The commission is 0.12–0.18 % of the trade value with a minimum of $1.75, and there is no added spread or custody fee. The EU offer covers 11 coins, including Bitcoin, Ether, Solana and XRP. Two points to check: whether coins can be transferred out to your own wallet in your region, and the fact that crypto holdings are not covered by investor-protection schemes such as SIPC in the US or the FSCS in the UK.

Exchange-traded products. In the US, spot Bitcoin ETFs have traded since 11 January 2024, spot Ether ETFs since 23 July 2024 and the first spot Solana ETF since 28 October 2025. Annual fees are about 0.20–0.25 % (for example BlackRock's Ether ETF ETHA 0.25 %, Bitwise's Solana ETF BSOL 0.20 %). Retail investors in the EU generally cannot buy US-listed ETFs, because they lack the EU key information document required under the PRIIPs rules. The European equivalents are physically backed ETPs listed on exchanges such as Xetra:

Sources: issuer pages, read 31 Oct 2026. Examples, not a complete list.

An ETP or ETF adds a small yearly fee but removes the need to manage keys, sits in a normal brokerage account and is easier to document for tax. What it gives up is direct ownership: the holder owns a share of a product, not the coin.

Staking: earning a yield on Ether and Solana

Ether and Solana holders can "stake" their coins to help secure the network and earn new coins in return. In 2026, network-wide staking yields were roughly 3 % a year for Ether and 5–7 % for Solana, according to staking providers. The yield is paid in the coin itself, so it does nothing against a fall in the coin's price, and staking through an exchange adds that exchange's risk; some staked coins also take days to unlock. Some ETPs and the Bitwise Solana ETF stake part of their holdings.

The three routes side by side

Many long-term holders combine routes: buy on a regulated exchange, then withdraw to a hardware wallet; or hold an ETP in the brokerage account and keep a smaller amount in self-custody. Whatever the route, the size of the position matters more than the platform. Our guide on Bitcoin in a portfolio works out position sizes from the falls Bitcoin has had, and Bitcoin vs Ethereum vs Solana compares the three largest platforms on return and risk.

The live figures for Bitcoin, Ether and Solana, with their worst falls and trend-following results, are in the free Research Terminal.

Frequently asked questions

Hamann, H. (2026). How to buy and store crypto: exchanges, hardware wallets and brokers compared. InvestWealth.com. https://www.investwealth.com/learn/guides/how-to-buy-and-store-crypto

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