Crypto Basics

Hot Wallets vs. Cold Wallets: What’s the Difference and Which Crypto Wallet To Use in 2025?

Discover the key differences between hot and cold crypto wallets. Learn which one suits your needs and how Token Metrics helps secure and grow your crypto investments.
Token Metrics Team
8 min
MIN

As cryptocurrency adoption accelerates globally in 2025, one critical question for both beginners and experienced investors is: Where should you store your crypto assets safely?

The answer lies in understanding the difference between hot wallets and cold wallets — the two main categories of cryptocurrency storage. This highly informative and SEO-optimized blog will help you understand:

  • What hot and cold wallets are
  • Key differences between them
  • Pros and cons of each
  • Which one is right for you
  • How platforms like Token Metrics help you choose and manage your wallet securely

🔐 What Is a Cryptocurrency Wallet?

A crypto wallet stores your private and public keys, enabling you to send, receive, and manage digital assets like Bitcoin, Ethereum, or altcoins. Unlike traditional bank accounts, crypto wallets give you full control over your funds — but with that control comes the responsibility of securing them.

Wallets are typically categorized as:

  • Hot Wallets – connected to the internet
  • Cold Wallets – offline storage solutions

⚡ What Is a Hot Wallet?

A hot wallet is a crypto wallet that is connected to the internet. It’s designed for easy access and quick transactions, making it ideal for active traders and everyday use.

đŸ”č Examples of Hot Wallets:

  • Web wallets: MetaMask, Trust Wallet, Phantom, Rainbow
  • Desktop wallets: Exodus, Electrum
  • Mobile wallets: Coinbase Wallet, Atomic Wallet
  • Exchange wallets: Binance, Coinbase (custodial)

✅ Pros of Hot Wallets:

  • Instant access to crypto
  • User-friendly interfaces
  • Ideal for frequent trading or DeFi
  • Compatible with most crypto platforms

❌ Cons of Hot Wallets:

  • Vulnerable to hacks and phishing
  • Depends on internet connection
  • Risk of malware or keylogging
  • Not ideal for large holdings

Hot wallets are often recommended for storing smaller amounts of crypto for daily use.

🧊 What Is a Cold Wallet?

A cold wallet refers to any crypto wallet that is not connected to the internet. It’s a form of offline storage designed for maximum security.

đŸ”č Examples of Cold Wallets:

  • Hardware wallets: Ledger Nano X, Trezor Model T
  • Paper wallets: Printed QR codes with private keys
  • Air-gapped computers: Devices permanently offline

✅ Pros of Cold Wallets:

  • Immune to online attacks
  • Long-term storage for HODLing
  • Control over private keys
  • Ideal for institutional and high-net-worth users

❌ Cons of Cold Wallets:

  • Less convenient for quick access
  • Physical loss or damage is a risk
  • Requires technical knowledge
  • More expensive (hardware wallets can cost $50–$200)

Cold wallets are ideal for long-term investors storing large amounts of crypto.

🔄 Hot Wallet vs. Cold Wallet: Key Differences

🔧 How to Use Hot and Cold Wallets Together (Hybrid Strategy)

Many crypto investors in 2025 use a dual-wallet strategy:

  • Hot wallet for trading, staking, and DeFi
  • Cold wallet for long-term storage and high-value assets

This balances convenience and security while minimizing exposure to threats.

For example:

  • Use a hot wallet like MetaMask to access the Token Metrics Moonshots tab and buy trending altcoins.
  • Transfer profits to your cold wallet (e.g., Ledger) for safekeeping.

🧠 How Token Metrics Helps You Manage Wallet Security

đŸ”č Wallet Integrations

Token Metrics supports:

  • MetaMask, WalletConnect, and other hot wallets
  • Portfolio tracking synced with your wallet
  • Real-time alerts when assets in your wallet are surging or at risk

đŸ”č Smart Trading with AI

Token Metrics helps reduce the need to frequently move funds by:

  • Identifying only high-quality tokens using AI Trader and Investor Grades
  • Sending price alerts, so you know when to buy/sell
  • Providing in-platform swap tools for direct trades from your hot wallet

đŸ”č Moonshot Monitoring

For early-stage altcoins, timing is everything. Token Metrics lets you:

  • Monitor your Moonshot investments
  • Get notified when to take profits or exit
  • Transfer to cold storage with a single click

🔒 Hot Wallet Security Tips (2025 Edition)

If you’re using a hot wallet:

  • Enable 2FA (Two-Factor Authentication)
  • Use a hardware wallet to sign large transactions
  • Avoid clicking suspicious links or connecting to unknown dApps
  • Disconnect wallets after use

Always back up your seed phrase and store it securely offline.

💬 Which Wallet Should You Use?

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đŸ§© Final Thoughts

Whether you’re storing $100 or $100,000 in cryptocurrency, your wallet choice directly impacts your security, accessibility, and peace of mind.

  • Hot wallets offer convenience, but must be used with caution
  • Cold wallets offer security, but come with trade-offs in usability
  • Platforms like Token Metrics bridge the gap by offering real-time insights, wallet integrations, and AI-driven trading tools

In 2025, don’t just store your crypto—store it wisely. Combine hot and cold wallet strategies and leverage tools like Token Metrics to build a secure, intelligent crypto portfolio.

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Token Metrics Team
Token Metrics Team

Recent Posts

Announcements

Token Metrics Launches $200K Grant Program to Back Crypto Builders

Token Metrics Team
8 min
MIN

In an era where crypto is moving faster than ever, the next generation of innovation will be driven by bold builders who fuse AI with blockchain. Whether it’s a project that analyzes sentiment across the market, scores tokens with precision, or generates real-time trading signals—Token Metrics is here to fund the future.

That’s why we’re excited to announce the Token Metrics $200K Grant Program — a bold initiative to empower crypto innovators at any stage.

💾 Why We’re Launching This Grant

Crypto innovation has always thrived on open experimentation. But we know firsthand how tough it can be to go from idea to product. You need the right tools, data, support, and—yes—capital.

We’re opening the doors to all Web3 builders, researchers, hackers, and startup teams with one goal: to supercharge the creation of AI-powered crypto tools that change the game.

If you're building anything in:

  • Crypto market intelligence
  • Sentiment analysis
  • Token scoring systems
  • AI trading bots
  • On-chain analytics
  • DeFi strategy tools


then this program is for you.

🎁 What You Get

Here’s what each selected project receives:

✅ Up to $5,000 in Grants

No strings attached. We’re offering non-dilutive microgrants to help you push your project forward—whether it's hosting costs, engineering hours, or marketing.

✅ Free Access to Token Metrics API

You’ll get direct access to our AI-powered crypto data platform, including investor and trader grades, signal alerts, technical indicators, and more. Build with institutional-grade tools.

✅ Technical Support and Mentorship

Our engineering and product team is on standby to help you with integration, use cases, and product guidance. Get real feedback from people who live and breathe crypto trading and AI.

✅ Community of Builders

You’ll join a thriving ecosystem of developers, analysts, and AI tinkerers who are all solving similar challenges. Share feedback, collaborate, and level up together.

🛠 Who Can Apply?

The grant is open to all stages of projects:

  • 💡 Idea Stage – Have an idea and a plan to build? You’re eligible.
  • đŸ§Ș Beta/Prototype – Already building and testing? Let’s accelerate you.
  • 🚀 Launched Product – Need support to scale? We’re here for it.
  • 💰 Paying Users – Time to expand? We can help you get there faster.

No matter your background, location, or company size—if you’re building something innovative at the intersection of crypto + AI, we want to hear from you.

🌐 What You Can Build with the Token Metrics API

The possibilities are vast. Some ideas we’d love to see:

  • AI-powered Token Rating Tools – Use our Trader and Investor Grades to generate insights.
  • Crypto Sentiment Dashboards – Analyze and visualize market sentiment.
  • Trading Signal Generators – Build bots or dashboards using our buy/sell indicators.
  • Risk Analysis Engines – Combine our technical metrics with your models.
  • DeFi Portfolio Managers – Use our price predictions and volatility data to manage risk.
  • Educational Crypto Apps – Leverage our AI grades to teach users how to DYOR.

Want to create something we haven’t thought of? Even better.

📆 Timeline & Application

The $200K will be distributed over multiple rounds across 2025, with applications reviewed on a rolling basis.

Apply once and you’ll be considered for current and upcoming rounds.

Deadline: First batch review begins July 15, 2025.

👉 Apply here now

đŸ€ Why Build with Token Metrics?

At Token Metrics, we believe the future of investing is intelligent, data-driven, and decentralized. That’s why we’re opening up our core infrastructure—so you can build tools that make crypto smarter for everyone.

We’ve spent years perfecting our AI models, data pipelines, and trading signals. Now, we’re putting that power in your hands.

Whether you’re a student hacking on weekends, a startup looking for product-market fit, or a solo dev with a bold vision—we want to help you win.

🚀 Let’s Build the Future

This isn’t just a grant—it’s a launchpad.

With $5K in non-dilutive funding, direct access to cutting-edge crypto data, and a community of top-tier builders, you’ll have everything you need to bring your project to life.

The next breakthrough tool might be yours. All it takes is one application.

🔗 Ready to apply? Click here → https://forms.gle/T3WGexLdGr9nF1hj9

Let’s build the future of crypto—together.‍

The Token Metrics Team

Research

Crypto Index Fund: How AI Is Revolutionizing Crypto Index Investment

Token Metrics Team
8 min
MIN

The Rise of Crypto Index Funds

As the cryptocurrency market matures, investors are increasingly seeking structured and diversified ways to participate without picking individual tokens. Just as index funds transformed traditional finance, crypto index funds are reshaping digital asset investing. These funds allow investors to gain broad exposure to the crypto market through a single investment vehicle, making them a compelling choice for both new and experienced participants.

But in a fast-moving, data-heavy environment like crypto, efficiency is everything. This is where AI-enhanced crypto index investment comes in—offering smarter rebalancing, risk management, and data-driven selection strategies that outperform traditional index methodologies.

What Are Crypto Index Funds?

A crypto index fund is a digital asset investment product that tracks the performance of a group of cryptocurrencies, typically weighted by market capitalization, theme, or other quantitative factors. Similar to traditional index funds in equities (like the S&P 500), a crypto index aggregates tokens into a single, trackable basket, allowing investors to diversify easily.

Key Features of Crypto Index Funds:

  • Diversification: Spread risk across multiple crypto assets.
  • Passive Investment: No need to actively trade or research individual tokens.
  • Low Fees: Typically lower management costs than hedge funds or active trading.
  • Rebalancing: Regular updates to maintain target weights and asset mix.
  • Transparency: Index compositions and methodologies are usually public.

Popular Crypto Index Themes:

  • Top 10 or Top 25 by Market Cap
  • DeFi Index: Includes projects like Uniswap, Aave, Compound.
  • AI Tokens Index: Focused on artificial intelligence crypto projects.
  • NFT Index: Tracks platforms like Blur, Rarible, or OpenSea tokens.
  • Meme Coin Index: A speculative basket for high-risk investors.

Why Crypto Index Investment Is Gaining Popularity

Crypto markets are volatile, fast-moving, and often driven by unpredictable narratives. Many investors, especially institutions or those new to the space, are uncomfortable managing a portfolio of dozens of altcoins. That’s where crypto index investment provides a safe entry point.

Benefits of Crypto Index Funds:

  1. Reduced Volatility: Spreading capital over multiple assets cushions against extreme swings.
  2. Time-Saving: Investors don’t have to stay glued to charts or news.
  3. Risk Management: Poor performers get phased out during rebalancing.
  4. Benchmarking: Investors can measure their returns against established crypto indices.

The Problem with Traditional Crypto Index Funds

Despite their advantages, most crypto index funds still rely on static rule sets:

  • Fixed Rebalancing Intervals: Usually monthly or quarterly, which may not align with real-time market shifts.
  • Market Cap Bias: Overexposure to large-cap tokens can dilute exposure to high-growth assets.
  • No Signal Integration: They ignore on-chain activity, social sentiment, or developer metrics.

In a market as dynamic as crypto, these limitations mean missed opportunities and reduced alpha.

Enter AI: The Future of Efficient Crypto Index Funds

AI is revolutionizing how crypto indices are built, managed, and optimized. By ingesting real-time data from hundreds of sources, AI-powered systems can outperform static, rules-based indices in terms of returns, risk mitigation, and adaptability.

How AI Enhances Crypto Index Investment:

  1. Dynamic Rebalancing Based on Signals
    • Instead of rigid monthly rebalancing, AI uses market signals (e.g., momentum, trend strength, liquidity) to adjust allocations daily or even hourly.
    • Example: Exiting meme tokens during a bearish shift, reallocating to AI tokens gaining traction.
  2. Sentiment Analysis and News Detection
    • AI scans Twitter, Reddit, Telegram, and news sites for bullish/bearish sentiment, helping identify trends before they go mainstream.
    • This is crucial for niche tokens with limited historical data.
  3. On-Chain Metrics and Smart Contract Activity
    • AI monitors transaction volumes, active wallets, staking ratios, and developer commits to detect growth or decline before prices reflect it.
  4. Risk-Adjusted Weighting Models
    • Rather than simply weighting by market cap, AI uses volatility, Sharpe ratio, and correlation models to dynamically assign weights.
    • This reduces overexposure to volatile assets and boosts overall portfolio efficiency.
  5. Backtesting and Optimization
    • AI can simulate thousands of portfolio combinations over historical data to find optimal strategies based on the user’s risk profile.

Real-World Example: AI-Driven Crypto Index Platforms

Some platforms are already pioneering AI-powered crypto indices:

  • Token Metrics AI Indices: Combine machine learning with market sentiment to allocate and rebalance crypto portfolios automatically. They feature bullish and bearish signals that guide when to enter or exit an index.
  • Bitwise & Galaxy Indices: Though more traditional, they’re beginning to explore data-driven rebalancing and smart beta strategies.
  • DeFi Pulse Index (DPI): A static sector index for DeFi, but when enhanced with AI (e.g., incorporating protocol usage data), it could evolve into a dynamic performer.

The Future: Personalized AI Crypto Index Funds

Imagine a world where your crypto portfolio isn’t just passively tracking a fixed list—but actively evolving based on your risk profile, market trends, and even your trading behavior.

AI will enable:

  • User-Customized Indices: Choose themes (e.g., AI, RWA, Gaming) and let AI build and manage the ideal mix.
  • Automated Exit Strategies: AI detects early warning signals and reallocates your funds to stablecoins.
  • Goal-Based Investing: AI manages your crypto portfolio to hit a target (e.g., 15% annualized return or reduce drawdowns under 10%).

Final Thoughts: Best Crypto Index Investing Starts with AI

Crypto index funds offer a powerful solution for investors looking to simplify their entry into the world of digital assets. But in a space defined by speed, volatility, and complexity, static methods are quickly becoming outdated.

By incorporating AI into crypto index investment, the future becomes more adaptive, predictive, and personalized. Whether you're a passive investor or an active trader looking for an edge, AI-powered crypto indices are unlocking a new frontier in digital wealth creation.

Announcements

Build the Future of Crypto Trading: Integrating Token Metrics with LangChain for Smarter Crypto Decisions

Token Metrics Team
8 min
MIN

The rise of AI in crypto trading has opened new frontiers, and Token Metrics is leading the charge by enabling developers to build intelligent trading agents using its powerful API. The latest innovation? A seamless integration with LangChain – a popular framework for building context-aware agents using large language models (LLMs). In this blog post, we’ll break down how this integration works, what it enables, and why it represents a game-changing leap in automated crypto analysis.

What is LangChain?

LangChain is an open-source framework that helps developers build applications powered by large language models like Gemini, Claude, and OpenAI. It enables developers to build a wide range of advanced AI solutions, including:

  • Conversational agents
  • Retrieval-based question answering
  • Tool-using AI agents
  • Autonomous decision-making bots

By providing a flexible structure, LangChain makes it easy to integrate LLMs with real-world data sources and external tools, empowering your application to both reason and take action.

What is the Token Metrics API?

The Token Metrics API is a rich data layer for crypto investors, analysts, and builders. It provides real-time and historical data across:

  • AI-powered Trader and Investor Grades
  • Daily/Hourly OHLCV metrics
  • Bullish/Bearish AI signals
  • Quantitative indicators
  • Curated Crypto Indices

With over 80 data points per token and robust filtering, the API makes it easy to identify profitable tokens, spot market trends, and build intelligent trading strategies.

Why Combine LangChain and Token Metrics?

Combining LangChain with Token Metrics lets you build AI-powered crypto agents that deliver market analysis and actionable insights. These agents can:

  • Analyze crypto prices, trends, and sentiment using AI-driven methods
  • Apply predefined strategies or custom logic for automated decision making
  • Generates clear, human-readable insights and trading signals
  • Identify and highlight tokens with strong profit potential

This integration equips your crypto applications with intelligent, data-driven capabilities to support smarter trading and research.

Getting Started: Building the Agent

The integration process begins with cloning a GitHub repository (public upon video release), which includes everything needed to run a Token Metrics x LangChain demo agent. After installing the dependencies and opening the codebase in a code editor, you’ll find a fully documented README that walks you through the setup.

Step 1: Install Dependencies 

Navigate to the project directory and install the required packages using:

‍

Step 2: Configure Environment Variables

Before spinning up the agent, add your Token Metrics API key and your LLM API key (Openai, gemini, etc..) to the .env file. These credentials authorize the agent to access both Token Metrics and your chosen LLM.

Step 3: Define and Run the Agent 

The agent logic is explained directly in the README and starter code sample, making it easy to follow and customize. You’ll find clear instructions and code snippets that guide you through setting up the agent’s capabilities.

The agent supports two main modes:

  • Simple Agent: A straightforward agent that answers user questions using Token Metrics tools. It’s ideal for quick queries and basic crypto research tasks.
  • Advanced Agent: A more powerful agent capable of reasoning through complex tasks, chaining together multiple tools, and providing deeper analysis. This agent can handle multi-step queries and deliver more comprehensive insights.

Powered by LangChain’s ReAct (Reasoning + Acting) framework, your agent can:

  • Access a suite of Token Metrics tools for crypto analysis, including price data, trading signals, grades, and sentiment
  • Apply predefined strategies or custom logic for automated decision-making
  • Generate clear, human-readable insights and trading signals
  • Filter and highlight tokens based on objective, data-driven criteria

With comprehensive documentation and step-by-step guidance in the README, you can quickly build, customize, and deploy your own intelligent crypto research assistant—no separate agent.py file required.

A Real-World Example: Finding Winning Tokens

Here’s how the agent works in practice:

  • It queries tokens with a valid Trader Grade
  • Filters tokens with Bullish AI signals
  • Compares Trading Signal ROI vs Holding ROI
  • Filters out tokens that aren’t outperforming with active trading

In the test case, it identifies BANANAS S31 as a top candidate:

  • High trader grade
  • Bullish signal
  • Strong Trading Signal ROI (better than holding)

At the end of its analysis, the bot outputs a summary of:

  • Overall market sentiment
  • Top token opportunities
  • Macro-level recommendations

In this case, while BANANAS S31 stood out, the overall market leaned neutral with a slight long-term bearish bias, a useful snapshot for any trader.

Switching to the Advanced Agent

LangChain’s flexibility allows the same bot to switch into an interactive chatbot by attaching memory to the agent. Users can now type in:

“What are the top 3 tokens to watch today?”
“Is the market bullish or bearish?”
“Give me DeFi tokens with bullish signals.”

The agent can dynamically select and chain together specialized crypto analysis tools in response to your questions. This means the agent doesn’t just answer queries with static information but it actively pulls the latest Token Metrics data, applies AI-driven analytics, and synthesizes insights using multiple sources and methods. 

As a result, you will get clear, context-aware responses about market trends, trading signals, token performance, and more. All grounded by the Token Metrics APIs

Key Benefits of This Integration

Here’s why this LangChain x Token Metrics setup is a big deal:

✅ AI That Acts

LangChain agents go beyond conversation—they can autonomously scan and analyze crypto markets using a suite of Token Metrics tools.

✅ Actionable Data

Token Metrics transforms complex market data into actionable insights, empowering the agent to support smarter trading and investment decisions.

✅ Current Market Analysis

Every time the agent runs, it draws on up-to-date Token Metrics data, ensuring responses reflect the latest market conditions.

✅ Fully Customizable

Tailor the agent to your needs, filter by DeFi tokens, set custom ROI thresholds, or incorporate additional data sources like social sentiment. The open-source codebase makes it easy to adapt the agent for any use case

What Can You Build With This?

This framework provides a versatile foundation for a wide range of crypto applications, including:

  • Personal trading assistants
  • Crypto Telegram bots
  • LLM-integrated crypto dashboards
  • Quant strategy testers
  • AI-powered newsletters and daily briefs

By combining a powerful API with a reasoning engine, you unlock a new frontier in crypto intelligence.

Final Thoughts

The integration of Token Metrics with LangChain shows what’s possible when deep crypto analytics meets autonomous reasoning. Instead of flipping between dashboards, you can build an agent that does the research for you, surfaces profitable tokens, and delivers daily alpha—automatically.

Whether you’re a developer, trader, or AI enthusiast, this setup gives you a robust foundation to experiment, build, and push the future of AI trading forward.

Try It Yourself

Once the repository is public, you’ll be able to:

  • Clone it from GitHub
  • Add your API keys
  • Customize your agent
  • Start generating automated crypto insights today

Click here to view the demo.

AI agents are the future of trading—and with Token Metrics and LangChain, the future is already here.

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