Understanding different crypto wallet types is essential for both users and businesses in the digital asset space.

This article breaks down the main wallet types available in 2025 and explains how BTSE Enterprise Solutions helps businesses build their own crypto wallet platforms for end users.

Main Types of Crypto Wallets

The two main types of wallets are custodial and self-custodial wallets. With custodial wallets, a centralized authority such as an exchange holds your keys. This means that if you lose your password or accidentally use the wrong wallet address, there's a centralized customer support team that can help you resolve issues.

With self-custodial wallets such as MetaMask, everything is decentralized, and there's no authority to help you reverse transactions on the blockchain. The benefits are autonomy and anonymity, but if you lose your keys or screw up a transaction, there's no one to help you get your money back.

Here's a summary:

Custodial Wallets

• Private keys held by a third party (e.g., centralized exchanges)

• Easy access with familiar credentials and 2FA

• Integrated fiat on-ramps and insurance options

• Risks: depend on custodian’s security, solvency, and compliance

Self-Custodial Wallets (Non-Custodial)

• Users hold their own private keys and recovery phrases

• Includes software wallets (mobile, desktop, browser extensions such as MetaMask) and hardware wallets (cold storage devices such as Ledger)

• Full control and privacy, no intermediaries

• Requires diligent backup and security practices

Hot vs Cold Wallets

• Hot wallets: Internet-connected, convenient but more vulnerable to hacks

• Cold wallets: Offline devices for secure long-term storage, less convenient but much safer

• Many use a hybrid approach—hot wallets for daily use, cold wallets for savings

How BTSE Enterprise Solutions Supports Business Wallet Platforms

Businesses launching crypto wallet services face complex challenges in security, compliance, and scalability.

It's not just about setting up a wallet app. Wallet services need to come equipped with things like third-party custodians, integrated KYC/AML services, and payment gateways that can offer on/off-ramps for many different types of currencies.

BTSE Enterprise Solutions offers a full suite of support services:

• Turnkey Infrastructure: Secure, fully managed backend for custody, transaction processing, and wallet management

• Enterprise-Grade Security: Custody powered by Fireblocks with multi-layer protections to safeguard assets

• Regulatory Compliance: Integrated KYC/AML tools such as SumSub to meet global regulations seamlessly

• Customization & Scalability: White-label platforms customizable for branding, multi-asset support, and smooth user experience

• Ecosystem Integration: Access to multiple blockchains, fiat on/off-ramps, trading tools, APIs, and crypto payment features

• Quick Time to Market: Accelerate product launch with BTSE's proven technology and operational expertise

Summary

There are many different kinds of wallets in the cryptocurrency industry. Each has its own pros and cons. What's clear is that setting up a wallet platform is much more than about setting up a mobile app. You oftentimes need to provide a whole suite of services that support it.

If you're a business looking to set up your own crypto wallet platform for end users, contact us to see how BTSE Enterprise Solutions can help you.