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How Do I Move My Crypto Off An Exchange?
Most people start their crypto journey by signing up to a cryptocurrency exchange and buying some of the ‘big’ coins, such as Bitcoin or Ethereum.
The first purchases are usually small, but over time as the individual’s confidence grows, they may add to their existing bags while expanding their portfolio with some additional digital assets.
It’s at this point that crypto investors begin to think about security and perhaps worry about how safe it is to leave their coins on an exchange.
After all, there have been some high-profile hacks in the past, and even as recently as 2022 a large crypto exchange called FTX collapsed.
Here, I’ll explain how you move your Bitcoin and other cryptos off an exchange and keep them safe.
Should I move my coins off the exchange?
Exchanges are much more secure than they used to be and many offer guarantee schemes for clients.
But there’s still the risk of a black swan event which leads to the loss of your entire crypto portfolio.
And, less dramatically, there’s the chance that regulation may impact the security of your digital assets, or the exchange could freeze you out.
There’s a mantra that’s often quoted in the crypto community about the risk of storing digital assets on an exchange – ‘not your keys, not your coins’.
In simple terms, this means that if you keep your coins on an exchange, the platform retains control of your public and private keys.
In crypto, your public key is the wallet address that you use to receive and store crypto. It’s perfectly safe to share this address with anyone you wish to transact with.
Your private key is usually a 12-24 word seed phrase, sometimes referred to as a mnemonic passphrase. This is the key to your crypto and anyone with this information can potentially take control of your coins.
The only way to truly secure your crypto is by taking full control of these keys and moving to a self-custodial storage solution, such as a hardware or software wallet.
How do I move my coins off a cryptocurrency exchange?
The good news is that it’s very easy to move your digital assets onto a self-custodial wallet.
The thought of sending your crypto into the ether may seem daunting at first, but you’ll soon get the hang of moving your coins around once you’ve done it a couple of times.
However, before you get started, you’ll need to choose your non-custodial solution which in most cases will either be a hardware or software wallet.
Hardware wallets are seen as the most secure as they’re rarely connected to the internet, however they’re slightly more technical to use than a software wallet and cost money to buy.
Software wallets, such as Exodus and Trust Wallet, are free and extremely easy to set up. However, they’re not quite as safe as a hardware wallet due to the fact they’re constantly exposed to the threat of cyber-attack because they’re connected to the internet.
There are other pros and cons to each solution which you should consider carefully before selecting the one that’s best for you.
I’ve chosen a non-custodial wallet, now what do I do?
When you set up your non-custodial wallet, you’ll be given a private key (seed phrase). You’ll also be assigned wallet addresses for different crypto which you can use to receive coins (just make sure you use the right one!).
It’s imperative that you store your seed phrase securely and never share it with anyone you don’t trust as it can be used to steal your crypto.
Your wallet addresses are what you’ll use to receive coins from elsewhere, including a crypto exchange.
Exchanges vary slightly when it comes to the GUI, but they all offer features for withdrawing/sending and receiving crypto.
This will enable you to choose the coin, the amount and the destination, which in the case of self-custodial storage, will be the wallet address.
You’ll be prompted to either past this address into the destination address or scan a QR to autocomplete with these details.
You’ll then be shown the fee for making the transfer. Some coins are more expensive than others to send. Bitcoin and Ethereum can be expensive, while Litecoin and Dogecoin are cheaper.
Before proceeding, double check that the coin you are sending matches the receive address you are sending it to, and that the address you’ve entered on the exchange matches the one on your non-custodial wallet. Once you’re happy that everything’s in order, hit send.
Don’t panic if the coins don’t arrive immediately
Crypto transactions are rarely instantaneous, and in the case of Bitcoin it can take a while before the coins appear in the destination wallet so don’t panic.
The reason for this is that the transaction has to be confirmed and added to the blockchain in a process called mining before it arrives in the new wallet.
All being well, you’ll see your coins, minus the fee, arrive in your self-custodial wallet within a few minutes.
Congratulations – you’ve just moved your coins off an exchange and onto a self-custodial wallet for safe keeping!
If at any point you want to return the coins to the exchange, you simply need to carry out the same process, but in reverse. Another fee will be payable to do so.
What should I know about self-custodial crypto storage?
Keeping your coins safe in a self-custodial solution can give you peace of mind when it comes to crypto security.
But it’s important to remember that you are now solely responsible for your digital assets.
If you lose access to your wallet there’s no customer services department to call – it’s your responsibility and yours alone.
So, as you can see, being your own bank has its pros and cons!
I can’t stress enough how important it is to protect your seed phrase if you go the self-custodial route.
There are various solutions to securely storing your private key, such as the Billfodl metal tablet.
This involves writing your seed phrase in metal letters and fixing them into a secure metal holder, which is extremely resistant to fire and other damage.
Another option which is more suitable if you’re concerned about theft is to split your seed phrase over two or more pieces of paper and store them in separate locations.
However, there’s still the risk of fire or other forms of loss, so consider two or more metal tablets, especially if you have a large crypto portfolio.
You may also like: How to securely store your crypto seed phrase
Appoint a digital executor for your crypto
Another thing you should do if you decide to move your coins off an exchange is appoint a digital executor specifically for your crypto.
You’ll need the person or persons to be trustworthy and technically proficient enough to get to grips with crypto and wallet technology.
It might be best to do a trial run with them to make sure they can use your wallet and access your coins in the event that you die suddenly.
You may also like: Why you must appoint a digital executor for your crypto
Crypto coaching and advice
If all this seems a bit baffling don’t worry, help is on hand!
We offer a coaching/advice service which will help you learn the basics of buying and selling cryptocurrency such as Bitcoin and Ethereum, using an exchange and transferring your coins to a hardware or software wallet.
See our crypto Advice Services page for more information.
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Disclaimer: Nothing on this website constitutes financial advice. The information provided is for educational purposes only.
