How Does ‘Cold Storage’ Custody Differ from ‘Hot Wallet’ Custody for Institutional Crypto Assets?

Cold storage involves keeping the private keys offline, completely disconnected from the internet, offering the highest security against cyber theft. This method is used for the vast majority of an institution's assets.

Hot wallet custody involves keeping keys online, connected to the internet, for quick access and transactional purposes. Hot wallets are used for a small portion of assets needed for immediate trading or operational needs but carry a higher risk of hacking.