Data from numerous studies indicates that the hardware wallet industry can grow faster than cryptocurrency exchanges.

The current bear market has accelerated the development of the cold wallet industry, while many centralized crypto exchanges have been scrambling to maintain operations. According to a report by business intelligence firm Vantage Market Research, global cryptocurrency exchanges generated $330 million in revenue in 2021.

The report, released on July 21, indicates that the global cryptocurrency exchange market will generate $675 million in revenue by 2028, at a compound annual growth rate (CAGR) of 12.7%. Other reports suggest that this accounts for at least half of the compound annual growth rate (CAGR) associated with the hardware wallet industry growth.

The global hardware wallet market has reportedly reached a value of $252 million in 2021 and is expected to reach $1.1 billion by 2027, or show a compound annual growth rate of 27.2%.

The concept of cold hardware or wallets has grown increasingly in recent years amidst major centralized crypto exchanges limiting access to some users’ funds over various types of issues. Hardware wallets are becoming more and more popular amid the ongoing crypto winter, prompting some crypto platforms and exchanges to halt withdrawals.

This is another important use case of cold wallets versus cryptocurrency exchanges and lending platforms, where the user does not really control the private keys and therefore does not control the funds. Unlike centralized cryptocurrency exchanges, hardware crypto wallets are not vulnerable to external manipulation as the assets of a cold wallet cannot be frozen. However, these wallets are still subject to other risks such as theft, destruction or loss.

According to some industry experts, relying only on hardware wallets or only on exchanges is not the best solution for cryptocurrency holders.

“Hardware wallet providers seem to be taking advantage of this disaster and I hope more people end up learning the many ways to self-guard. I think it’s a logical lesson to learn from all of this,” Quantum Economics CEO Matty told Cointelegraph.

Related: What happens if you lose or break your hardware crypto wallet?

Greenspan noted that storing all the money on the exchange is certainly a risk, but recent history contains a lot of stories from people who tried to keep themselves safe and also lost their money. he added:

“Self-incubation is important but not as important as diversification. The only way to actually reduce risk is to diversify.”
Itay Avnery, chief operating officer and executive vice president of digital asset platform INX, believes that the hardware crypto wallet industry will continue to grow, “especially when more centralized and trusted exchanges fail to protect client funds due to hacks or misuse.” He pointed out that innovative companies are working on self-preservation solutions that remove the risk of losing the customer or forgetting their private keys.

“This will make it easier to hold your keys and reduce major barriers to allowing the mass retail market to join the cryptocurrency economy,” Avnery added. “Ideally, it should be just as easy as creating an email.”

Source: CoinTelegraph