Amid growing concerns over centralized cryptocurrency exchanges in the wake of the FTX crisis, investors are increasingly moving to hardware crypto wallets.
A major hardware wallet provider, Trezor, has recorded a major uptick in wallet sales in the aftermath of the FTX contagion, the firm’s brand ambassador Josef Tetek told Cointelegraph on Nov. 15.
Trezor saw its sales revenue surging 300% week-on-week and it’s still growing, Tetek reported. The platform has also recorded a significant spike in its website traffic, which increased 350% over the same period, the exec noted.
According to Tetek, Trezor is quite certain that the uptick in new wallet users was a result of issues with FTX, a crypto exchange at the center of the latest industry scandal involving the misappropriation of user funds. The spike in demand for Trezor wallets started early last week, exactly when “rumors of the FTX insolvency started circulating,” Tetek reported.
Trezor expects further growth in new users in the near future as the failure of middlemen in crypto would only continue to unfold, Tetek suggested, stating:
“We expect this trend to continue in the short to mid term, as the contagion of FTX failure continues to unwind and Bitcoin or cryptocurrency holders lose trust in custodians and finally start to explore their options to self-custody their digital assets.”
Cryptocurrency investors have been increasingly moving to self-custody with software and hardware wallets, with exchange outflows nearing all-time highs by mid-November 2022.
Ledger, a major rival hardware wallet supplier, has recorded a significant surge in demand for its devices recently as well. The French cold wallet firm saw one of its highest traffic days ever shortly after FTX stopped all crypto withdrawals last week, triggering inventors to offload their funds from exchanges to cold storage as soon as possible.
Amid the ongoing FTX contagion, even some of the biggest crypto exchanges started promoting the need for self-custody. Binance CEO Changpeng Zhao admitted on Nov. 14 that centralized exchanges may no longer be necessary as investors would shift to self-custodial solutions like hardware or software wallets.
“If we can have a way to allow people to hold their own assets in their own custody securely and easily, that 99% of the general population can do it, centralized exchanges will not exist or probably don’t need to…