Definition
The practice of holding your own cryptocurrency private keys rather than leaving assets on an exchange or third-party custodian. Self-custody means you have full ownership and responsibility for your crypto.
Why It Matters
The collapse of FTX in 2022 showed why self-custody matters. Billions in customer funds were lost. If you hold your own keys, no exchange failure can touch your crypto.
Example
Instead of leaving Bitcoin on Coinbase, a user withdraws to a Ledger hardware wallet. Now only they control the private keys — and only they can access the funds.
Related Terms
Hardware Wallet
Non-Custodial
Seed Phrase
Private Key