Trezor, a major manufacturer of hardware crypto-wallets - or crypto-wallets that you physically keep with you - has revealed that demand for their devices has increased significantly recently. This follows a period when a number of crypto companies collapsed and exchanges even suspended withdrawals.
According to a company spokesperson, Bitcoin (BTC)
and crypto holders "are getting nervous about holding their cryptocurrencies with administrators and are exploring self-custody options."
As a result, the company has seen a large increase in demand for Trezor devices. This is because with a Trezor wallet, people can manage their cryptocurrencies themselves and are not at risk of having their money frozen or losing it because a centralized exchange cannot meet their financial obligations.
Of course, storing cryptocurrencies on a hardware wallet has its own risks, but they are generally considered less significant than holding crypto on an exchange.
The collapse of Three Arrows Capital, Celsius and Voyager
Trezor's observations come not only during a crypto bear market, but also during the massive chain reaction in which a number of crypto companies found themselves struggling not to drown.
In the aftermath, we saw companies halt withdrawals and transfers, which drew criticism from their users and the broader community - but also pulled related companies down due to a resulting contagion. Perhaps most notable are the bankrupt crypto fund Three Arrows Capital, crypto platform Voyager Digital and crypto lender Celsius. Voyager and Celsius have also filed for bankruptcy.
Nick Saponaro, founder and CEO of crypto
payment platform Divi Labs, noted that now that Celsius has filed for bankruptcy, "there is now a big question mark over whether its customers will be able to get their investments back," adding:
"Self-management is no longer a choice but an imperative."
Saponaro said the point of crypto is to give each individual what they are entitled to: financial sovereignty. Yet people will give up that sovereignty and control over their own money as long as they use centralized services, he said, adding:
"There has never been a more important time to ensure that people understand the risks of using centralized exchanges and consider other options that ensure they continue to have access to their coins and don't lose their entire portfolios, should an exchange go bankrupt."