Introduction
Cryptocurrencies are digital funds. Whereas, technically, these are your money in the digital space, which are actually real. Just like having your money in a bank account, these digital currencies need to be safely kept and stored in private keys - these are called crypto wallets.
Traditionally, when you open a bank account, you'll have to do it personally while providing needed requirements. While in the digital space, setting up a crypto wallet can be done easily online.
In this guide, we'll provide a step-by-step guide on how you can create one so you can get started with crypto venture.

Types of crypto wallets and their set up process
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Here's a list of all the types of crypto wallets along with a step-by-step guide on how you set up each of them depending on your preference.
Software wallets
These are also known as hot wallets. These are applications that you can install on your computer or preferred device. These wallets keep your cryptocurrency accessible online. Generally, these are very easy to use with features including lending and staking. However, the only downside to these wallets, is that since these are connected to the internet, it's more prone to hacking unlike the offline options.
Setting Up a Software Wallet
Software wallets are popular for their ease of use and accessibility. Here's how you can set up one:
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Download the application: Begin by choosing your preferred wallet app that suits your needs. If you're unsure, you can refer to this guide on the best crypto wallets for 2025. Download the app from a reliable source into your desktop or mobile device.
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Create your account: Follow the application's set up process for account creation as instructed. Create a password and set up more security features like facial recognition or fingerprint scan.
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Record your recovery phrase: While setting up, the app will generate a 12 or 24-word recovery phrase. This is important info that you should not forget about. Write it down and store it securely in a place where only you can access it.
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Add crypto to your wallet: After securing and setting up your wallet, you can start adding cryptocurrency. This can be done by transferring funds from another wallet or linking your wallet to an exchange.
Hardware wallets
In contrast, these are also known as cold wallets. These are physical devices designed to store your cryptocurrency offline. That being said, this option is more secure from online threats. These devices work when connected to your computer or phone via USB, WiFi, or QR code. These can be bought for $50 to $250.
Setting Up a Hardware Wallet
Hardware wallets offer enhanced security by keeping your keys offline. Here's how you can set up yours:
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Purchase the device: Ensure to buy a device or hardware wallet from a trusted manufacturer or authorized retailer. Upon receiving the device, turn it on and set up a PIN code. This pin code should be an information you keep to yourself, to secure the device against unauthorized access.
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Install the software: Each hardware wallet comes with its own software for managing your cryptocurrency. Download and install this software on your computer or mobile device.
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Connect your wallet: Connect your wallet to your computer or smartphone. Depending on the device, you can connect this using USB connection, WiFi, or scanning a QR code. Or better yet, read and follow the manufacturer's instructions for connecting the wallet and ensuring it is properly linked to your software.
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Transfer your crypto: Use the wallet's software to transfer cryptocurrency from another wallet or exchange. Some hardware wallets also offer features for purchasing crypto directly. Ensure to use the correct wallet address to avoid errors during the transaction process.
Custodial Wallets
This third version is a wallet that is managed by third-party platforms including cryptocurrency exchanges. This practically means, instead of safe keeping your digital currencies personally, these platforms will do it on your behalf. Thus, aside from making it more seamless and convenient for trading it's also a way for easy access. What makes this wallet stand out is it comes with more features which includes insurance and recovery options.
Setting Up Custodial Wallet
Custodial wallets are managed by third-party services, simplifying the process of safe keeping your cryptos. Here's how to get started:
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Choose a trusted platform: The first thing to do and the most important step is to select a reputable exchange or service provider that offers custodial wallets. When choosing one, look for features that offer enhanced security measures, insurance against losses, user friendly interface, and reliable customer support, to ensure good experience.
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Create an account: Register on the chosen platform by providing necessary details such as your email address and creating a secure password. Usually there will be a verification process, this involves submitting personal information and a photo ID. Moreover, depending on the platform, follow further instructions to complete the registration process.
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Add cryptocurrency: After you complete your custodial wallet set up, you can add cryptocurrency by transferring funds from another wallet or purchasing directly through the exchange. If you need more information on wallets, you can read An Overview of Crypto Wallets. Use the wallet address provided by the platform for transfers.
Conclusion
Depending on your preference, these wallets aim to serve the same purpose. Although, each of the options are distinct in terms of security and convenience, thus, it's important to weigh which factor is more valuable on your end. Nevertheless, you can't start your crypto journey without a wallet so you'll have to choose from these three with which suits you best.