SoFi

There is growing interest in using digital assets like crypto as part of retirement planning. This comes as federal agencies have started to lay the groundwork for a more robust regulatory framework for crypto, and more financial institutions are folding cryptocurrencies into their offerings. Certain established cryptocurrencies like Bitcoin have also seen marked growth over years of turbulent highs and lows.

However, if you’re considering the idea of holding crypto in an IRA, there are some important factors you need to know. Crypto is a complex, highly volatile asset, and there are significant risks to holding crypto in an IRA. In addition, it’s still more loosely regulated than many other types of assets. Here’s what individuals need to be aware of when it comes to a crypto IRA.

What Is a Crypto IRA?

A crypto IRA is an individual retirement account in which individuals can hold digital assets such as Bitcoin, Ethereum, or other cryptocurrencies in the account. A crypto IRA is sometimes referred to as a Bitcoin IRA (Bitcoin is the largest cryptocurrency in terms of total market value).

As cryptocurrency has gained more recognition in the last few years, there has been some interest in holding crypto in a retirement account like an IRA. Approximately 10% of Americans with a retirement account say they hold crypto in their account, according to a July 2025 survey by NerdWallet and The Harris Poll. Younger retirement savers are especially likely to hold crypto: 18% of millennials and 14% of Gen Zers say they have crypto as a retirement holding.

There are different types of IRAs, including traditional IRAs and Roth IRAs, and it’s possible to hold crypto in either one. Each has particular withdrawal rules and tax implications (see more about this below).

But whatever type of IRA an individual may be interested in, it’s important to be aware that IRAs are designed to be long-term savings accounts for retirement. Crypto is highly volatile and risky — if it drops in price, there could be serious negative implications for an individual’s retirement fund. Risk and volatility are factors individuals considering a crypto IRA should carefully consider.

Tax Considerations for a Crypto IRA

A crypto IRA has specific tax implications, depending on the type of IRA it is. For example, with a traditional IRA, individuals make contributions to the account with pre-tax dollars, and any earnings — from crypto or other assets — grow tax-deferred in the account. The account holder pays taxes on qualified withdrawals taken in retirement, which is considered by the IRS to be aged 59 ½ or older.

With a Roth IRA, contributions are made with after-tax dollars. Any earnings, including earnings from crypto, grow tax-free in the account. Qualified withdrawals — for individuals who are at least age 59 ½ and have had the Roth IRA for at least five years — are tax-free in retirement.

Crypto IRAs are subject to the same contribution limits as other IRAs. For 2025, the IRA contribution limits are $7,000 for those under age 50 and $8,000 for those age 50 or older. For 2026, the limits are $7,500 for those under age 50 and $8,600 for those age 50 or older.^[1]

Potential Benefits of Holding Crypto in an IRA

While a crypto IRA poses some significant risks, it may also have potential advantages. Possible benefits of holding crypto might include:

•   Access to an emerging asset class: Cryptocurrencies are still a relatively new asset class. Bitcoin, the first established cryptocurrency, launched in 2009, but it didn’t become popular until the Covid-19 pandemic more than a decade later. With a crypto IRA, individuals could get some exposure to this developing asset class.

•   Tax advantages: As mentioned earlier, crypto may grow tax deferred in a traditional IRA, or tax-free in Roth IRA, just like any other asset held in the IRA. That said, individuals with a crypto IRA may want to consult with a tax professional about the specifics.

•   Portfolio flexibility: Holding crypto within an IRA is a way for an individual to include another asset class beyond the more traditional types of assets, such as cash equivalents, stocks, or bonds, within their portfolio.

Risks and Limitations of a Crypto IRA

A crypto IRA has a number of risks, and individuals who are considering the idea of crypto for their retirement account should weigh the drawbacks very carefully. Risks include:

•   Volatility: Cryptocurrencies are highly volatile. For example, there have been several periods when the price of Bitcoin plummeted more than 60% in value, including a 64% drop in 2022. By some estimates, Bitcoin can be up to 5 times more volatile than stocks and bonds.^[2]

•   High-risk asset: Crypto is a speculative asset and it can have a high degree of price volatility as noted above. Individuals who have a low tolerance for risk, or those who are close to retirement age when they will need their savings, may not be well suited to a crypto IRA.

•   Evolving regulations: While federal crypto regulations offering consumer protections have started to take root, they are in the relatively early stages of development. In addition, not all crypto IRA custodians (the financial institution that sets up the IRA) may follow the same level of safe security practices for crypto, which could lead to the assets not being handled properly.

•   Fees: Crypto IRAs generally come with more fees than conventional IRAs. For example, some crypto IRA providers may charge individuals to set up a crypto IRA. In addition to set-up fees, other possible fees include annual maintenance fees, transaction fees, and fees for holding the assets, which are typically known as custody fees. Fees vary by provider, so individuals considering a crypto IRA should compare providers.

How to Get Started With a Crypto IRA

Opening a crypto IRA typically involves several steps.

1.    Choose a crypto IRA custodian. Interested individuals should do some research to find providers that offer a crypto IRA. Some major brokerages now offer these accounts. Other crypto custodians include specialized firms that offer self-directed IRAs (SDIRAs) that are designed to hold cryptocurrencies. Individuals can look for a crypto custodian they feel comfortable with.

2.    Understand fees and account requirements. While evaluating crypto IRA providers, inquire about any fees charged and other account requirements. Ask how crypto assets will be stored and what security measures the company has in place. Compare providers’ policies and fee structures.

3.    Open the account. Once an individual has chosen a provider, they can open a crypto IRA account. They’ll typically need to provide their personal information, such as name and address, Social Security number, and bank account information.

4.    Fund the account. Individuals can fund their crypto IRA with money directly from their bank account. Depending on the type of IRA it is, they can use pre-tax or after-tax dollars. They can then make crypto transactions within the account.

Decide if a Crypto IRA is Right for You

A crypto IRA may be of interest to some individuals seeking exposure to this emerging asset class, but there are also some significant drawbacks to these accounts. Crypto IRAs involve high risk, are extremely volatile, and have fewer protective regulations than many other assets. For those close to retirement age or individuals with a low tolerance for risk, a crypto may not make sense.

While a crypto IRA does have potential advantages, including certain tax benefits, it’s important to carefully weigh the pros and the cons of these accounts. Individuals should consider their risk tolerance, savings timeline, and financial goals before making a decision.

The Takeaway

Crypto IRAs are a type of retirement savings vehicle in which individuals can hold cryptocurrencies in the account. Crypto IRAs may have potential benefits for some individuals, but they also come with significant risks, including high volatility, evolving regulations, and possibly higher fees. It’s wise for individuals to do their research and investigate these accounts thoroughly to make sure a crypto IRA is right for them.

Soon, SoFi members will be able to buy, sell, and hold cryptocurrencies, such as Bitcoin, Ethereum, and more, and manage them all seamlessly alongside their other finances. This, however, is just the first of an expanding list of crypto services SoFi aims to provide, giving members more control and more ways to manage their money.

FAQs

Is it a good idea to put crypto in a retirement account?

Whether it’s a good idea to put crypto in a retirement account depends on an individual’s risk tolerance, retirement savings timeline, and financial goals. Cryptocurrencies are highly volatile and risky assets, and there is a potential for financial losses.

What is a self-directed IRA (SDIRA)?

A self-directed IRA (SDIRA) is an IRA that allows individuals exposure to a broader range of assets than conventional IRAs. These assets may include crypto. With a SDIRA, the account holder has full control and management over the assets in their account.

What are the tax advantages of a crypto IRA?

Tax advantages of a crypto IRA depend on the type of IRA it is. With a traditional IRA, contributions are made with pre-tax dollars, earnings grow in the account tax-deferred, and an individual pays taxes on withdrawals in retirement. With a Roth IRA, contributions are made with after-tax dollars, and earnings in the account grow tax-free. Withdrawals are tax-free in retirement.

Are the fees higher for a crypto IRA than a traditional one?

Crypto IRAs (sometimes referred to as Bitcoin IRAs) generally have higher fees than conventional IRAs. Fees vary by provider, and possible charges may include set-up fees, custody fees, annual maintenance fees, and transaction fees.

Can I add crypto to my existing 401(k) or Roth IRA?

Generally speaking, no. It’s difficult to add crypto to an existing 401(k) since the assets you can choose from depend on what your employer offers. With a Roth IRA, you would need to have an IRA custodian that offers crypto assets, such as a Bitcoin ETF. You could instead set up a self-directed IRA or a crypto IRA and add crypto to that account.

Photo credit: iStock/kate_sept2004

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CN-Q425-3236452-02

In the crypto space, the term slippage refers to the discrepancy between how much someone expects or anticipates paying for a particular crypto asset, and how much they actually end up paying for it. In other words, slippage is the difference between the expected price and the executed price, which may occur for a number of reasons, including volatility or low liquidity in the market.

Slippage, then, has some obvious implications for anyone buying or selling digital assets in the crypto market. Read on to learn more about slippage, why it occurs, and how, or if, you may reduce its impact on your financial plan and overall portfolio.

Understanding Slippage in Crypto

As noted, slippage refers to the difference between the expected or anticipated price of a digital asset, and the price that a market participant ends up actually paying. It’s important to note that slippage can work for or against someone looking to buy or sell a digital asset; that means that you could end up slightly ahead after a transaction, or slightly behind, depending on which way the slippage occurs.

Slippage occurs in other areas of the financial markets, too.

For instance, slippage occurs in equities, or the stock markets. It can happen in bond and foreign exchange markets, also referred to as Forex trading. It happens pretty much anywhere that financial assets are being bought or sold. The typical drivers of slippage are low trading volume or frequency, or low liquidity. That happens when there’s a relative shortage of participants in a market — it may take a short period of time to match a buyer and seller, and within that time frame, bid and ask prices change, or slip, slightly.

Here’s an example: Say someone wants to buy a specific municipal bond over-the-counter. The individual’s brokerage can and will facilitate the purchase, but the bond has fairly low liquidity. The bond’s price hits a level that the individual finds acceptable, so they decide to execute the transaction and buy the bond.

However, due to the bond’s low liquidity, it takes a short time for the brokerage to negotiate and fill the order. During that time, the bond’s price increases, or slips up, slightly. When the order executes, the buyer has paid a slightly higher price than anticipated or expected — they have witnessed slippage first-hand.

The same scenario could play out in almost any financial market, including the crypto space.

What Causes Slippage in Crypto?

There are a few main drivers of slippage in the crypto markets, including liquidity levels, volatility, and transaction delays on blockchain networks or crypto exchange.

Low Liquidity

As discussed, asset liquidity and volume levels can be a primary driver of slippage, especially in the crypto markets. While low liquidity may not be a key factor for certain larger cryptos, such as Bitcoin (BTC), smaller cryptocurrencies, with smaller market caps or total presence on the markets, could experience slippage as brokers require more time to match buyers with sellers — who may be scarcer.

High Volatility

The crypto markets tend to be highly volatile, with major price swings being fairly common. With swift market movements, asset prices are likewise shifting up and down rapidly, making it more likely that prices could “slip” between the time an order is placed and it is executed. So, the more volatile the market, the more likely it is that slippage could occur.

Network Delays

Crypto transactions take place on blockchain networks, and those networks can and do get busy if many participants are trying to execute transactions. During those times, transactions could be delayed, and during those delays, prices could slip. Similar to volatility on markets, the busier or more congested a blockchain network is, the more likely participants are to experience slippage.

It’s also important to note that the crypto markets never close – they operate all day, every day. There are also different exchanges with different operating procedures, and not all of them offer every cryptocurrency. So, that could be yet another factor that can cause slippage to occur.

Positive vs Negative Slippage

As discussed, slippage can work against or for market participants. Or, put another way, it’s possible that someone buying or selling a cryptocurrency could see the price slip up or down in a way that nets or saves them money on the transaction, or vice versa.

Positive slippage: For example, if you were buying a cryptocurrency at a price of $1, and the blockchain network was experiencing delays due to congestion, the execution of the transaction could get hung up. During that stretch, the price of the cryptocurrency in question slips down to $0.95, and is then executed. You would have actually saved money during the transaction due to slippage.

Negative slippage: Conversely, the price could also slip the other direction. Say during the network delay, prices slipped to $1.15 — in that case, you’d actually be paying more than anticipated due to slippage, and probably be pretty irritated about it. But such is the risk of participating in the crypto markets.

How Is Slippage Calculated?

To calculate slippage in crypto, you’ll need to do some simple calculations. In fact, it’s more or less looking at the difference between two prices — so, some simple subtraction. Remember, though, that slippage can be either positive or negative.

But if you want a formula, this one should do the trick:

How to Reduce Slippage in Crypto Transactions

If the prospect of slipping has you concerned, rest easy, as there are a few techniques you can use to reduce the chance of slippage in your crypto transactions.

Determine a Slippage Tolerance

Similar to how someone might determine their risk tolerance level when buying or selling other types of market assets, it may be helpful to determine a slippage tolerance before transacting any crypto. That means you’re going into transactions aware that slippage may occur and cost you a bit of money. Knowing that, how much slippage are you okay with? Think about it — it may be a good ballpark number to think of being okay with slippage ranging between 0.25% and 1%, for example.

Some crypto platforms allow you to set your slippage tolerance level. Keep in mind that entering a lower tolerance percentage could cause you to miss the opportunity to buy or sell a cryptocurrency, though of course setting it too high could result in you paying a price you may not be comfortable with.

Using Limit Orders

Another option to consider to reduce the impact of slippage is to set a limit order, which will only execute when the cryptocurrency reaches the limit you set, or a better price. As with setting a tolerance level on the platform, the risk is that you may miss out on an opportunity to buy or sell the cryptocurrency if your limit is too tight. Taking factors such as the crypto’s volatility level into account may also inform the tolerance level you choose.

Use Platforms With Deeper Liquidity

Since low liquidity and asset volume can be a prime driver of slippage, it may be a good idea to use platforms with deeper liquidity and higher volume in an effort to avoid or reduce slippage. Again, there’s no guarantees, but busier platforms may have reduced instances of slippage.

Transact During High-Volume Periods

Similarly, you can try and make your transactions during times when there are many other market participants in the mix. That’s another way of saying that there’s high liquidity and market volume, again, reducing the chances of slippage. Along those same lines, you’ll want to try and avoid volatile periods, or cryptocurrencies with fewer transactions (low liquidity). Remember, as well, that factors such as volatility and liquidity may vary depending on the type of cryptocurrency you’re purchasing or selling.

Risks to Keep in Mind

There’s likely no avoiding a certain amount of slippage in the crypto market, so you may want to think of it as one of the broader elements at play in the crypto space. That includes relatively high volatility, unpredictable levels of demand, and evolving technology and regulations. The crypto space, though becoming more mainstream, is still rife with risk.

Further, know that there will be costs associated with crypto transactions. Slippage could be a part of that, but blockchain networks may also levy gas fees, the transaction fees crypto users pay to cryptocurrency validators, or other types of fees on participants.

The Takeaway

Crypto slippage is, in simple terms, the difference between an expected crypto price and the actual, or executed price. It can work both ways — someone transacting in crypto may end up paying more than anticipated, or paying less as a result of slippage.

While there’s likely no avoiding it completely, there are things you can do to try and diminish slippage’s effects, such as establishing a slippage tolerance level, and transacting on high-volume and high liquidity platforms.

Soon, SoFi members will be able to buy, sell, and hold cryptocurrencies, such as Bitcoin, Ethereum, and more, and manage them all seamlessly alongside their other finances. This, however, is just the first of an expanding list of crypto services SoFi aims to provide, giving members more control and more ways to manage their money.

FAQs

What causes slippage in crypto markets?

Slippage is most commonly caused by low liquidity or order volume in the crypto markets, and that’s generally true for the broader financial markets, too. It can also occur due to network congestion or delays on blockchain markets, more specifically to the crypto space.

Is slippage always a bad thing?

Slippage can work to a market participant’s advantage if prices slip in their favor, and they end up saving money or spending less. So, no, slippage is not always a bad thing.

What is a good slippage tolerance percentage to set?

An overall slippage tolerance will vary from individual to individual, but it may be a good target range to have a tolerance of 0.25% up to 1% or so. That may depend, too, on specific crypto assets that are being bought or sold.

How is slippage calculated in a crypto transaction?

Slippage is calculated by finding the difference between the expected and executed price. The formula looks like this: Slippage (as a percentage) = (Executed price – expected price) ÷ expected price x 100.

Can you completely avoid slippage on a decentralized exchange (DEX)?

No, you likely can’t completely avoid slippage on a decentralized exchange, but there are things you can do to try and minimize slippage.

About the author

Samuel Becker

Sam Becker is a freelance writer and journalist based near New York City. He is a native of the Pacific Northwest, and a graduate of Washington State University, and his work has appeared in and on Fortune, CNBC, Time, and more. Read full bio.

Photo credit: iStock/Marc Bruxelle

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Among decentralized cryptocurrencies, none surpasses the popularity of Bitcoin (BTC). There are currently around 19.9 million bitcoins in circulation as of October 2025, with a single bitcoin valued at close to $120,000.

Bitcoin is not unlimited; scarcity is built in by design with the goal of increasing demand for the currency. The total supply of Bitcoin tops out at 21 million. Once the cap is reached, additional bitcoins can’t be created. However, Bitcoins already in circulation would theoretically still be available for buying, selling, and using after the cap is reached.

How many Bitcoins are left to be mined? And when will the last Bitcoin be mined? Let’s look at how the bitcoin supply works and the relationship between the value of Bitcoin and scarcity.

How Many Bitcoins Exist Right Now?

As of October 7, 2025, there are 19.93 million Bitcoins in existence.^[1] That figure represents around 95% of the maximum Bitcoin supply. The number of Bitcoins in existence changes approximately every 10 minutes as miners add new blocks to the blockchain.

What Is Circulating Supply and How Is It Measured?

Circulating supply is an estimate of the number of coins that are publicly available and trading in the market. It is measured by counting all the Bitcoins that have been mined and are accessible, excluding coins that are probably lost (e.g., from wallets with lost private keys). Blockchain explorers track each mined block and total all outputs that are spendable. This number is updated in real time as new blocks are added roughly every 10 minutes.

How Many Bitcoins Are Mined Each Day?

New Bitcoins are created through mining, a process that involves solving complicated math problems in order to verify and secure transactions on the blockchain network. When a Bitcoin is successfully mined, the miner is rewarded with a predetermined amount of Bitcoin. The current reward for mining a unit (called a block) of bitcoin is 3.125.

The number of bitcoins mined daily depends on the current block reward and the average time to mine a new block, which is about 10 minutes. Here’s how the daily mining total is calculated:

•   Blocks per day: With one new block mined roughly every 10 minutes, the average number of blocks mined every 24 hours is 144 (6 blocks per hour x 24 hours).

•   Block reward: The current block reward is 3.125 bitcoins per block.

•   Total mined per day: Multiplying the number of blocks per day (144) by the current block reward (3.125) puts the daily total number of new bitcoins mined per day at 450 (144 blocks x 3.125).

This number will remain static until 2028, which is when the next Bitcoin halving event is set to occur. A halving event reduces the block reward by 50%. At the next halving event, the bitcoin block reward will be cut to 1.5625 BTC.^[2]

Recommended: Is Crypto Mining Still Worth It in 2025?

What Is the Maximum Number of Bitcoins?

The maximum bitcoin supply is set at 21 million coins, and that number will not change. The vast majority of bitcoins are already in circulation; approximately 1.1 million bitcoins remain to be mined.

Why Is There a Cap of 21 Million Bitcoins?

The cap of 21 million Bitcoins was established by Bitcoin’s presumed creator, Satoshi Nakamoto, with the idea of being resistant to inflation and mimicking the scarcity of precious resources like gold. This limit is written directly into Bitcoin’s code and cannot be changed without consensus from the entire network, making it a fundamental part of the cryptocurrency’s design. By fixing the total supply, Bitcoin was designed in response to the concern that central banks’ ability to print unlimited amounts of money could reduce a currency’s value over time.

The 21 million cap also creates a sense of digital scarcity, which could theoretically help Bitcoin maintain and potentially increase its value as demand grows. Of course, it’s important to keep in mind that other key factors influence Bitcoin’s price, including market sentiment and its history of high volatility.

Recommended: Bitcoin Price History: 2009-2025

Once all Bitcoins are mined, miners may continue to validate transactions and secure the network. However, they may rely on transaction fees rather than block rewards to cover their mining costs. This fixed supply is one of the core features that makes Bitcoin distinct from traditional fiat (government-backed) currencies.

How Many Bitcoins Are Permanently Lost?

An estimated 3 to 4 million bitcoins are permanently lost, which represents about 15% to 20% of all Bitcoins ever mined. Lost coins directly impact Bitcoin scarcity, liquidity, and long-term value. A lost coin that cannot be recovered is permanently removed from the circulating supply because there’s no central authority to reset access, effectively making the coin unusable forever.

How Coins Are Lost

Bitcoins are lost when their private keys become inaccessible or irretrievable. Private keys are essential for accessing and transferring Bitcoin. If an owner forgets a password, misplaces a hardware wallet, or throws away a hard drive containing a wallet file without backups, the coins cannot be spent because no one can sign transactions.

Sending Bitcoin to an incorrect or non-existing address (such as mistyping characters or using an address format incompatible with a given network) can also result in permanent loss.

Custodial failure at exchanges or wallet services, including hacks and insolvency, can make funds unreachable for users. In addition, Bitcoins can be lost due to software bugs or when degraded storage media corrupts wallet data.

Recommended: What Is a Crypto Wallet Address?

The Impact of Lost Coins on Bitcoin’s True Scarcity

Lost coins increase Bitcoin’s effective scarcity by permanently removing a portion of its supply from circulation. The reduction in usable supply may impact the price of the remaining coins, depending on demand and market sentiment. It also reinforces Bitcoin’s deflationary nature, further differentiating it from fiat currency.

How Many Bitcoins Are Left to Mine?

There are around 1.07 million Bitcoins left to mine. Approximately 918,000 Bitcoin blocks have already been mined. This upper limit on the Bitcoin supply is a key feature that distinguishes it from other coins that have a higher maximum cap, or no cap at all.

Calculating the Remaining Supply

The remaining supply of Bitcoin is calculated by subtracting the total number of coins already in circulation from the maximum number of Bitcoins that can be issued. The remaining supply is being released gradually into circulation according to a fixed schedule that is hardcoded into Bitcoin’s protocol.

When Will the Last Bitcoin Be Mined? The Path to 2140

The last Bitcoin is set to be mined sometime in 2140. That estimate is based on the asset’s underlying protocol, which is defined by a supply cap of 21 million coins and a “halving” event that occurs approximately every four years. As the block reward decreases, the rate of the new Bitcoins entering circulation slows down, too.

Once the last Bitcoin is mined, there will be no new coins issued. Only those that are in the circulating supply can be used to complete transactions.

How New Bitcoins Are Created (And Why It’s Slowing Down)

To understand how Bitcoin creation works and why it’s declining, you need to know how new coins are mined and how the halving process works.

A Quick Look at Bitcoin Mining

New Bitcoins are created through a process called mining, where powerful computers solve complex mathematical problems to validate transactions on the Bitcoin network. When a miner successfully adds a new block to the blockchain through the validation process, they receive a fixed number of Bitcoins as a reward.

What Is Bitcoin Halving?

Bitcoin halving is an event that reduces the reward for mining new blocks by 50%, which impacts the supply and potentially the price of Bitcoin. As mentioned above, the halving process occurs approximately every four years. The latest event happened on April 20, 2024, reducing the block reward to 3.125 BTC. The next halving event is expected in April 2028.

How Halving Guarantees the Supply Schedule

Halving guarantees the supply schedule by systematically reducing the rate at which new Bitcoins are introduced. Halving the rewards for mining every four years ensures that the number of new Bitcoins created follows a predictable, decreasing pattern, rather than expanding. This enables Bitcoin to maintain scarcity, mimicking resources like gold, and may help Bitcoin resist inflationary pressures.

What Happens When All Bitcoins Are Mined?

Once all 21 million Bitcoins are mined, no new coins can be issued. At that point, miners will no longer earn block rewards but will still be compensated through transaction fees paid by users. These fees will incentivize miners to continue validating and securing transactions on the network.

Bitcoin’s blockchain will keep operating as usual, but its monetary supply will become fixed. Since the supply can’t increase but demand might continue to rise, each Bitcoin could potentially become more valuable over time, although there’s certainly no guarantee this could happen.

The Takeaway

Bitcoin’s finite supply, capped at 21 million, creates scarcity that could potentially offer a hedge against inflation. While most Bitcoins have already been mined, new ones are continually introduced through a process called mining, which is slowing down due to halving events that reduce block rewards every four years.

An estimated 3 to 4 million bitcoins have been permanently lost, further contributing to the asset’s scarcity. The last bitcoin is projected to be mined around 2140, at which point miners may transition from earning block rewards to relying on transaction fees to maintain the network. This fixed supply model differentiates Bitcoin from traditional fiat currencies and was conceived as a key factor in its potential value.

It’s important for investors to be aware that Bitcoin’s finite supply is not the only factor that impacts its price, however. Like most cryptocurrencies, Bitcoin’s price has been extremely volatile over time, and it’s impossible to know what its future value may be.

Soon, SoFi members will be able to buy, sell, and hold cryptocurrencies, such as Bitcoin, Ethereum, and more, and manage them all seamlessly alongside their other finances. This, however, is just the first of an expanding list of crypto services SoFi aims to provide, giving members more control and more ways to manage their money.

FAQ

What happens when all 21 million bitcoins are mined?

When all 21 million Bitcoins are mined, no new Bitcoins will be created. This means miners will no longer earn block rewards but will instead rely on transaction fees for income. Bitcoin’s supply will become fully fixed, reinforcing its scarcity. The network is expected to continue to function as usual, with transactions processed and verified by miners, maintaining Bitcoin’s decentralized and secure blockchain system.

Will we ever run out of Bitcoin?

While we won’t “run out” of Bitcoin, the total supply of Bitcoin is capped to 21 million coins. Once that limit is reached, no new Bitcoins can be created. That said, Bitcoins already in circulation would still be available for buying, selling, and using. The network could continue to operate, and all activity would be based on the circulating supply.

When will the last Bitcoin be mined?

The final Bitcoin is expected to be mined around the year 2140. This timeline is based on Bitcoin’s halving events, which occur roughly every four years, cutting mining rewards in half. As these rewards diminish, the rate of new Bitcoin creation slows significantly. Even though that’s more than a century away, mining will gradually become less profitable, and transaction fees will likely become the main incentive for maintaining the blockchain.

How can I check the current number of Bitcoins in circulation?

You can check the current number of Bitcoins in circulation using blockchain explorers like Blockchain.com and CoinMarketCap. These sites track real-time blockchain data and display statistics such as total supply, circulating supply, and market capitalization. The figure updates automatically as new blocks are mined.

What happens to miners after the maximum supply is reached?

After all Bitcoins are mined, miners will no longer earn new coins as block rewards. Instead, they’ll be compensated solely through transaction fees paid by users to process and verify transactions. This helps ensure that miners still have financial incentives to maintain the network’s security and integrity.

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Sending cryptocurrency from one wallet to another can seem intimidating at first, especially given the irreversible nature of blockchain transactions. But whether you’re moving Bitcoin, Ethereum, or any other type of cryptocurrency, the core steps involve understanding your wallet, the blockchain network, and the recipient’s public address. This guide will walk you through what you need to know to confidently and securely send crypto, from choosing the right wallet to confirming your transaction and avoiding common pitfalls.

Crypto Wallets Explained (Your Digital Bank Account)

A crypto wallet is a tool for managing your cryptocurrencies. Here are some key wallet basics to know.

What Is a Crypto Wallet and How Does It Work?

A crypto wallet is software (or sometimes hardware) that lets you store, manage, and transact with your cryptocurrencies. Despite the name “wallet,” you don’t actually hold coins inside it in the traditional sense. Instead, a crypto wallet holds keys (public and private) that grant access to your crypto on the blockchain.

Wallets come in various forms, including mobile apps, hardware devices, and even paper (where you simply write or print-out your private and public keys). Paper and hardware wallets are referred to as “cold” wallets, since they’re not connected to the internet. Online wallets are “hot” wallets since they are connected to the internet. Regardless of the type of wallet you use, your cryptocurrency always remains on the blockchain.

The Role of Public and Private Keys

Sending and receiving crypto requires a public and private key. Here’s what they are and how they differ:

•   A private key is a string of numbers and letters that unlocks the right to access and spend your cryptocurrency. You can think of it as being similar to the username and password you use to log in to your bank account. Each time you send crypto, the transaction is signed with your wallet’s private key.

•   A public key is a string of numbers and letters that allows you to receive cryptocurrencies sent by other people. It’s mathematically derived from the private key and is used to generate your public (or wallet) address. You can think of it as similar to your bank account and routing number, which you might share with certain trusted groups to allow them to send you money.

Your crypto wallet also has a seed phrase (also known as a recovery phrase). This phrase, which is a random combination of 12 to 24 words, helps you recover all the private keys in your wallet, even if the wallet itself is deleted or lost.

Public keys are meant to be shareable, while private keys and seed phrases should never be shared. Anyone who has your private key or seed phrase could access your crypto wallet and its holdings.

Understanding Your Public Address (Your Crypto “Account Number”)

A public address, also known as wallet address, corresponds to a specific cryptocurrency stored in a crypto wallet. It works similarly to an email address in that it provides enough information to direct funds into an account without jeopardizing the wallet’s security.

Your public address is what allows you to complete transactions using cryptocurrency. If someone wants to send crypto to you, they’ll need your wallet address. If you want to send crypto to someone else, you’ll need their wallet address. The format your public address takes is tied to the type of cryptocurrency you hold. A typical wallet address is about 40 characters long and it’s important to make sure you have the correct address before hitting “send”.

Getting Started: What You Need Before You Send

Before you get into sending crypto between wallets, it’s important to make sure everything is set up correctly.

Choosing Your Wallet

Which wallet you use will have an impact on both ease-of-use and security. Here are some options to consider:

•   Mobile wallets (phone apps): With a mobile wallet, your public and private keys are stored and encrypted within the app, enabling you to access funds from anywhere with an internet connection. This makes them convenient for frequent transactions. However, their constant online connectivity means they may be vulnerable to cyberattacks.

•   Desktop wallets (software on PC/Mac): A desktop wallet securely stores your public and private keys on your computer or laptop. This type of wallet typically provides more features and controls than a mobile wallet, along with a larger screen. Since it’s always connected to the internet, it carries similar risks to a mobile wallet.

•   Hardware wallets: This is a physical device (often the size of a USB drive) designed to store cryptocurrencies offline securely. It requires some extra steps to use, but typically offers the highest level of security. Even if your computer is compromised, your private keys remain offline.

•   Custody wallets: Many crypto exchanges offer proprietary wallets. They are known as “custodial wallets” because the exchange holds and manages the private keys for the user. These wallets can be convenient and beginner-friendly, but also may be vulnerable to hacks and other security breaches, as well as potential restrictions or freezes by the provider.

Selecting the Correct Blockchain Network

If you’re using a crypto exchange to make a transfer, you may be prompted to choose a network. If so, it’s important to select the network that’s compatible with the cryptocurrency you’re sending and the recipient’s wallet. Here’s why.

Why Networks Matter

Each cryptocurrency operates on its own (or a compatible) blockchain network. Examples of blockchain networks include Bitcoin (BTC), Ethereum (ETH), BNB Smart Chain (BNB), Polygon (MATIC), Solana (SOL), and Litecoin (LTC).

The Risk of Sending Crypto to the Wrong Network

Sending cryptocurrency to the wrong network can lead to slower, costlier, and (if the networks aren’t compatible) lost transactions. Here’s a closer look at the potential fallout:

•   Incomplete transactions: Choosing the incorrect network may cause the transaction to fail, requiring you to contact customer support and possibly incur additional fees.

•   Slower transaction times: Different networks have different transaction times. Selecting the appropriate network helps ensure your transactions are completed quickly and efficiently.

•   Permanent loss of funds: If you send cryptocurrency to an incompatible network (such as sending Bitcoin to an Ethereum address), your funds could be lost permanently.

Understanding Network Fees

When you send a cryptocurrency, you’ll pay a fee for using the blockchain network. These fees, sometimes referred to as “gas” fees, help incentivize miners or validators to verify transactions and maintain the blockchain network’s security. Fees vary depending on the network, type of transaction, the speed you opt for (fast transactions generally cost more than slow or average) and how busy the network is (you typically pay more when the network is congested). However, these fees tend to be low. The median transaction fee for Bitcoin over the past year, for example, was around $0.45.

Keep in mind that network fees typically aren’t the only fees involved in a crypto transaction. The crypto exchange you’re using will likely charge fees of its own, and online wallets that aren’t part of the crypto exchange may charge a small fee whenever you make a deposit or withdrawal.

Having the Recipient’s Correct Public Address

To send crypto, you’ll need to obtain the recipient’s wallet address. Since transfers are irreversible, it’s key to get the correct address. Here are some tips to help ensure you’re sending crypto to the right person:

•   Copy and paste the address: If possible, you want to avoid typing the address manually — one wrong or missing character can send your crypto to the wrong place. By copying and pasting, you reduce the chance of making a mistake.

•   Scan a QR code if available: Since crypto wallet addresses are long, many wallets will show an address as a QR code that you can scan in your crypto app. Be sure to still carefully verify the address associated with the QR code before sending, since QR codes have been targeted by malware scams in the past.

•   Always double-check the address before sending: It’s wise to go through each letter and number individually to make sure none are missing, out of order, or incorrectly capitalized. This is especially important if you manually type the address. Only send crypto after you’re sure the address is an exact match.

•   Send a test amount: One way to confirm an address is correct is to send a tiny amount from your wallet and then make sure the recipient gets it. If the test is successful, you can go ahead and send the full amount.

How to Send Crypto: A Step-by-Step Walkthrough

The steps to send crypto can vary by wallet, but this is a basic overview of the process.

Step 1: Open Your Wallet and Select “Send”

Log in to your wallet, then choose the option to “send” or “withdraw” crypto from the menu.

Step 2: Choose the Cryptocurrency You Want to Send

If you hold multiple cryptocurrencies in the same wallet, you’ll need to select the one you want to send. Note that some wallets may require you to choose the type of cryptocurrency you want to transact in first, before you can select the send option.

Step 3: Enter the Recipient’s Wallet Address

Add your recipient’s wallet address in the “recipient” field. This will typically be a long string of numbers and letters and it needs to be exact.

Best Practice: Use the QR Code or Copy/Paste

Ideally, you want to copy and paste your recipient’s address or, if your wallet allows, scan a QR code provided by the recipient. Either option can help you avoid the kind of errors that can happen with manual entry.

Crucial: Double-Check the Address

Since crypto transactions are irreversible, you’ll want to make sure the address is correct. Even if you use the copy and paste feature, still double-check that the full address has been copied correctly.

Step 4: Enter the Amount to Send

Next, you’ll enter how much crypto you want to send. Make sure you have enough in your crypto balance to cover the transaction as well as the transaction fee.

Sending a Specific Crypto Amount vs. a Fiat Value

You may have the option to enter the amount you want to send in cryptocurrency or in fiat currency (government-backed money such as U.S. dollars). If this is an option, the wallet will typically do the conversion for you.

Step 5: Add a Memo or Destination Tag (if Required)

You may be asked to add a memo or destination tag before you can send crypto to another wallet. Destination tags or memos help identify who should receive the crypto you send and are separate from their public address.

Why Some Cryptos Need This for Exchange Deposits

Some crypto exchanges use one wallet address for all users. Adding the destination tag/memo helps ensure the crypto you’re sending goes to your recipient’s account. If you’re sending crypto to someone with a private wallet (such as a desktop or hardware wallet or a noncustodial app), you don’t need to include a destination tag/memo.

Step 6: Review the Network Fee

Take note of the transaction fee — it will be calculated automatically based on current network conditions. You may have the option to adjust the fee. However, this may impact the speed of the transaction.

How Fees Affect Transaction Speed

Higher crypto transaction fees generally lead to faster processing because it incentivizes miners or validators to prioritize your transaction. If you need your transaction to be confirmed quickly, you’ll want to go with a higher fee. Transactions with lower fees may only be processed when network activity is low.

Step 7: Review and Confirm the Transaction

Once you’ve entered everything you need to send crypto to another wallet, look over it again. Confirm the recipient’s wallet address, the amount you’re sending, and the fee. If everything looks good, you can go ahead and hit “Send” or “Confirm.”

Step 8: Wait for the Blockchain Confirmation and Verify on a Block Explorer

Once you’ve sent your transaction, it will show up as “pending” in your wallet until it’s confirmed by the network. If you want to know exactly where your transaction is on the network, you can enter your transaction ID into a blockchain explorer to view its status in real time.

Best Practices for Safe and Secure Transactions

Crypto transactions generally lack the protections you get with traditional banking transactions. For example, you’re typically fully liable for losses if you send crypto to the wrong address or use the wrong network. Observing some best practices can help you stay safe when sending crypto (or receiving it).

The Golden Rule: Send a Small Test Transaction First

As mentioned, it’s wise to send a small test transaction before you send the full amount to your recipient. That way, you can make sure that you have the correct wallet address and network.

Triple-Check Everything: The Correct Crypto, Network, and Address

You have multiple opportunities throughout the crypto sending process to review the information you’ve entered, so take advantage of them. Look at the crypto network to make sure it’s the right one for the type of crypto you’re sending. Check the wallet address that it’s going to. This doesn’t take long to do, and it can help you avoid errors or mistakes in sending.

Be Aware of Common Scams

Cryptocurrency attracts plenty of scammers, and it’s important to know how to spot a scam before you fall victim to one. Common crypto scams include:

•   Get-rich-quick schemes where a “fund manager” offers the promise of high returns if you buy cryptocurrency and transfer it into their online account

•   Fake giveaways that require you to send crypto to claim your prize

•   Love interest/catfishing scams that trick you into buying or sending crypto

•   Free money scams that promise you more crypto if you first send a small amount

•   “Celebrity” scams that use a famous person’s name or likeness to give credibility to a fake crypto opportunity

•   Government scams where a person claiming to represent an agency tells you that you can solve a legal issue by purchasing cryptocurrency

•   Fake job listings that ask you to pay a fee in crypto to get more information about an open position or purchase “supplies” that you’ll need to do the job

•   Blackmail scams, in which someone claims to have “dirt” on you, like a sordid browser history or videos they plan to share with your friends and family if you don’t send crypto

To avoid being a victim of a crypto scam, be wary of any requests for crypto from people you don’t know, met online, or those who claim to be celebrities, government officials, or representatives of major companies. Also be sure to verify recipient details before you send any crypto. And above all, trust your gut. If something seems too good to be true, it probably is.

How to Receive Crypto Safely

If you need to receive crypto, these steps can help ensure your coins arrive quickly and safely.

1. Ensure Network Compatibility

Before accepting a transfer of crypto, you’ll want to make sure the wallet or exchange you’re using supports the cryptocurrency you’ll be receiving. If the sender tries to transfer crypto from one blockchain to another, the tokens could get lost en route to your wallet.

2. Find and Share Your Public Address or QR Code

To find your public address, open your wallet app or software and navigate to the “receive” section. This is a string of numbers and letters, and may also be available as a QR code. You can share your address by copying the full alphanumeric string and pasting it into a message or email. If you have a QR code, you can send it as a picture or allow someone to scan it in person.

3. Confirm You’ve Received the Funds

You can confirm you’ve received the funds by checking the transaction history or balance in your crypto wallet. Or, you can monitor the transaction status on a public blockchain explorer using the transaction ID provided by the sender. A completed status on the block explorer signifies the funds are securely in your wallet.

Troubleshooting Common Issues

Every now and then, you may hit a snag when sending or receiving crypto. Knowing what to do can help you solve the issue.

Why Is My Transaction “Pending” or Stuck?

A pending or stuck crypto transaction can happen when the network is congested. This occurs when there are a lot of people using it to complete transactions, or if you or your sender selected a lower transaction fee. In other instances, a transaction can get stuck or be slowed down if the crypto exchange that you’re using loses contact with the network.

These situations are not ideal, but they are fixable. You’ve got a few options to get the transaction moving again.

Options for Stuck Transactions

If a transaction gets stuck, you may be able to speed things up by adjusting the fee. Some wallets offer a Replace-the-Fee (RBF) feature. This gives you the option to pay more to get your transaction moving. If you’re on the receiving end of a stuck transaction, you can ask the sender to adjust their fee.

The Takeaway

Sending crypto safely comes down to understanding how wallets, networks, and addresses work — and taking the time to double check every detail before hitting “send.” Once you master the basics, and understand you may avoid delays or costly mistakes, you’ll be able to move crypto more confidently and quickly.

Soon, SoFi members will be able to buy, sell, and hold cryptocurrencies, such as Bitcoin, Ethereum, and more, and manage them all seamlessly alongside their other finances. This, however, is just the first of an expanding list of crypto services SoFi aims to provide, giving members more control and more ways to manage their money.

FAQ

Can crypto transactions be reversed?

No, crypto transactions cannot be reversed once confirmed on the blockchain. Cryptocurrencies operate on decentralized blockchain technology, which is designed to ensure transparency, security, and immutability. If you send funds to the wrong address or make an incorrect payment, there’s generally no central intermediary to reverse it. To avoid losses, always double-check wallet addresses and transaction details before sending crypto.

What happens if I send crypto to the wrong address?

If you send crypto to the wrong address, it’s usually impossible to recover it. Since blockchain transactions are irreversible and (typically) pseudonymous, funds sent to an incorrect or inactive address are generally lost permanently. However, if the recipient belongs to an exchange or wallet you can contact, you might be able to request recovery, though success isn’t guaranteed. Always verify the full address before confirming a transaction to prevent accidental losses.

What happens if I send crypto on the wrong network?

Sending crypto on the wrong network can result in lost or inaccessible funds. If your wallet supports multiple networks, however, you may be able to switch to the correct one to recover the funds. You can also try contacting customer support for the exchange or wallet. They may be able to manually recover your tokens, though it could take time and trigger fees. Always ensure the sender’s and receiver’s wallets use the same blockchain network before transferring crypto.

Why is my crypto transaction taking so long?

A crypto transaction may take longer than usual due to network congestion and/or paying a low transaction fee. When many users are sending transactions simultaneously, miners or validators prioritize those offering higher fees. Additionally, some blockchains naturally require more time for confirmation. If your transaction remains unconfirmed for hours, check its status on a blockchain explorer — it may simply need more network confirmations.

How do network/gas fees work?

Network or gas fees are small payments made to miners or validators for processing and confirming transactions on a blockchain. The fee amount depends on network activity, transaction size, and urgency. When the network is busy, users may offer higher fees to get faster confirmations. Conversely, setting a low fee might delay your transaction. These fees help secure the blockchain and incentivize participants to validate transactions accurately and efficiently.

What is a memo or destination tag, and when do I need it?

A memo or destination tag is an additional identifier used for certain cryptocurrencies to specify the recipient’s account within a shared wallet or exchange. If you don’t include this tag, your funds may not reach the correct account, even if the address is right. Always check whether the exchange or wallet requires a memo before sending; failing to include it may result in delayed or lost funds.

How do I know if my transaction was successful?

You should get a confirmation from the blockchain showing that your transaction was completed. You can also use a blockchain explorer to verify the details if you have the transaction ID.

You can verify the success of a crypto transaction by checking its status on a blockchain explorer using your transaction ID. A “confirmed” or “successful” status means it’s completed and recorded permanently on the blockchain. If it shows “pending,” it’s still awaiting confirmation. If you sent crypto to another wallet, you’ll also see the updated balance once the network validates the transaction.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

Photo credit: iStock/Jerome Maurice

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A crypto wallet address is a unique string of letters and numbers used to send and receive digital assets. It works much like a bank account number but is designed for peer-to-peer transactions on a blockchain network. If someone wants to send you cryptocurrency, you’ll need to share your wallet address — and if you want to send someone crypto, you’ll need theirs.

For anyone new to crypto, understanding how wallet addresses work is an essential first step. This guide explains what a wallet address is, why different blockchains use different address formats, and how to use your address safely and securely.

Your Wallet Address: The Digital Mailbox for Your Crypto

A crypto wallet address functions like a digital mailbox for your coins and tokens. It’s the address others use to send you cryptocurrency, whether from an exchange or another wallet. Each address is unique and is generated by your crypto wallet based on cryptographic algorithms that keep your funds secure.

Your Unique Identifier on the Blockchain

Wallet addresses come in the form of either a string of alphanumeric characters (often 26 to 35^[1]), which may also take the form of a QR code. An individual wallet can manage multiple different cryptocurrencies, each with its own unique address.

All transactions involving a wallet address are recorded on the blockchain. This makes the transaction history transparent and publicly viewable. However, your identity is not publicly displayed on a blockchain.

The Difference Between a Wallet and an Address

While the terms “wallet” and “address” are often used interchangeably, they are not the same thing.

A crypto wallet is a tool that allows you to manage and access your cryptocurrencies. Unlike a physical wallet that holds cash, a crypto wallet doesn’t technically store your crypto. Instead, it stores the private and public keys you need to interact with the blockchain, which is the ledger where your cryptocurrency actually resides.

A wallet address, on the other hand, is a public identifier for sending and receiving digital assets on a blockchain. Each type of cryptocurrency in a crypto wallet has its own address and unique format. For instance, a wallet can hold Bitcoin (BTC) and Ethereum (ETH), but you’ll need a separate Bitcoin address and a separate Ethereum address to receive each type of coin.

The difference between a wallet and an address is often likened to a key (the address) and key ring (the wallet).

How Addresses Connect to Your Public and Private Keys

As mentioned, crypto wallets do not store your digital assets, but rather hold the public and private keys that are fundamental for managing them on a blockchain.

The private key proves you own the cryptocurrency and allows you to authorize transactions. If you lose your private key, you lose access to your coins and can no longer spend, withdraw, or transfer them. You never want to share your private keys, as anyone with access to these keys can spend your funds.

The private key is used to generate a public key through an encryption process. The public key is then used to generate a public address, which is typically a shorter version of the public key that lets others know where they can send you crypto. The public key can also be shared via a QR code.

You usually don’t deal directly with these digital keys. Instead, they are stored in wallet files or managed by crypto wallet applications.

Why Do Crypto Addresses Look Different?

You may notice that not all crypto addresses follow the same format. The appearance and structure of an address depend on the blockchain it belongs to.

Different Blockchains = Different Address Formats

Each blockchain network, such as Bitcoin, Ethereum, Solana, or XRP, has its own way of creating and formatting addresses. These variations are important for ensuring compatibility with their respective blockchains and routing transactions correctly.

Sending crypto to an address on the wrong blockchain typically means your funds will be lost forever. That’s why it’s important to understand address formats before hitting “send.”

Bitcoin Address Example

Bitcoin addresses start with “1”, “3”, or “bc1” and are 26 to 35 alphanumeric characters in length.

Examples:

•  “17HzyHWNrdS7GpMArshSBLpJpcvrre93P6”

•  “3QfDwSv4SsRonMEZgnitKe5meSfNxBrkZM”

•  “bc1qm34lsc65zpw79lxes39zkqmk6ee2ewf0j77s3h”^[2]

Ethereum Address Example

Ethereum addresses typically start with “0x” and are 42 characters long.

Example:

•  “0x71C7656EC7ab88b098defB751B7401B5f6d8976F”^[3]

Solana Address Example

Solana addresses are 32 to 44 characters long and there is no specific prefix.

Example:

•  7EcDhSYGxXyscszYEp35KHN8vvw3svAuLKTzXwCFLtV”^[4]

Special Cases: Addresses that Require a Memo or Tag

Certain cryptocurrencies, especially those that use centralized crypto exchanges, require an additional memo or destination tag. Examples of these include XRP (XRP), Cosmos (ATOM), and EOS (EOS), or Stellar Lumens (XLM).

A memo or tag is a short string of letters or numbers that is used to make sure funds are credited to the correct account. It’s similar to mailing something to a specific address, but addressing the letter or package to an individual person at that address.

How to Use Your Wallet Address Safely

Here are some key safety points to ensure your keys and holdings don’t fall into the wrong hands.

How to Find and Share Your Address to Receive Crypto

While the process for finding your wallet address can vary, it typically involves opening your wallet, selecting the specific cryptocurrency you want to receive, then choosing “Receive.” In some cases, you may also need to select the network you want to use for the transaction. The crypto address or QR code will then automatically populate. You can then share the address by copying it to your clipboard then pasting it into an email or message with the sender, or by taking a screenshot of the QR code and sharing it with the sender.

The Triple-Check Rule Before Sending

If you’re sending crypto to someone else’s wallet, you’ll need their wallet address. Since crypto transactions are irreversible, it’s important that you enter the address correctly — one small typo can mean losing your crypto forever. Follow the triple-check method:

•   Is it the correct address? If you manually typed the address, check that every character is correct. If you used copy and paste, verify that the first and last few characters match your intended recipient’s address.

•   Is it the correct blockchain network? Make sure your wallet selects the correct network for the crypto you are withdrawing (such as the Bitcoin network for BTC or the Ethereum network for ETH and ERC20).

•   Does it need a memo/tag? For coins like XRP or XLM, find out if you’ll need to include a destination tag/memo before sending. Missing this step can result in lost funds.

The Risks of Reusing the Same Address

While it’s technically permitted to reuse a wallet address, doing so can compromise your privacy.

Because blockchains are public, anyone can look up your wallet address and see all the transactions associated with it. Using the same address repeatedly makes it easier for third parties to track transactions associated with that address. This could allow them to create a full financial profile for you, including information about your spending habits, earnings, and who you transact with.

This reduces the anonymity offered by crypto transactions and increases the risk of being targeted by hackers or scammers. That’s why it can be a good idea to generate a new address for every crypto transaction.

Security & Privacy: What Can People See?

Every blockchain is a transparent ledger, meaning all transactions are public. However, that doesn’t mean people can access your funds or see your personal identity just from your address.

Is It Safe to Share Your Public Address? (Yes, and Here’s Why)

Yes, it’s considered safe to share your public wallet address. In fact, you have to share it if you want to receive crypto.

Remember, your address only represents your public key, not your private key. People can see how much crypto is in that wallet and its transaction history, but they can’t move or spend your funds.

Using a Block Explorer to View an Address’s Transaction History

It’s possible to use a tool called a block explorer to view the transaction history of a given address on a blockchain network, though personal identification information is not shared. A block explorer is essentially a search engine specific to a blockchain. Examples include Blockchain.com for Bitcoin addresses, Etherscan for Ethereum addresses, and SolScan for Solana addresses.^[5]

You can paste a wallet address into a block explorer and typically view:

•   The wallet’s transaction history

•   Timestamp and amount of each transaction

•   The sender and recipient addresses for each transaction

•   Current token balances

The Golden Rule: Never Share Your Private Keys or Seed Phrase

Remember, you never want to publicly share your private keys. If a third party were to gain access to your private keys, they could access your holdings and potentially drain your wallet.

It’s equally important to guard your seed phrase, which is a sequence of random words that functions as the master password for your crypto wallet. If you forget your wallet password or you lose your hardware device, you can use your seed phrase to regain access to your digital assets. However, this means that anyone who gets hold of your seed phrase can do the same — and gain full access to your wallet and funds.

The Takeaway

A crypto wallet address acts as a unique, public identifier for your cryptocurrency and enables you to send and receive digital assets. While wallet addresses are visible and their transaction histories are publicly recorded, they are not directly linked to your personal identity.

It’s important to understand the differences between wallet addresses, public keys, and private keys, and to always safeguard your private keys and seed phrases to protect your funds. By carefully checking addresses before transactions and being aware of privacy implications, you can help ensure that you use crypto addresses safely and effectively.

Soon, SoFi members will be able to buy, sell, and hold cryptocurrencies, such as Bitcoin, Ethereum, and more, and manage them all seamlessly alongside their other finances. This, however, is just the first of an expanding list of crypto services SoFi aims to provide, giving members more control and more ways to manage their money.

FAQ

How do I get a crypto address?

To get a crypto address, you need to have a wallet. You can create a wallet through a trusted crypto exchange, by downloading a wallet app, or by purchasing a hardware wallet. Each wallet automatically generates unique public addresses for supported cryptocurrencies. You can usually find your address by selecting the coin and clicking “Receive.” Always copy it carefully — each cryptocurrency has its own format, and using the wrong one can cause permanent loss of funds.

Is it safe to give out my public crypto address?

Yes, it’s safe to give out or share your public crypto address, also known as your wallet address. It’s like giving someone your email address — they can send you emails but can’t access your inbox. However, your transactions and balance on that address are visible on the blockchain, so avoid linking your address to personal information. And never share your private key or seed phrase, as those give full access to your wallet and funds.

Can anyone see my balance with my address?

Yes. Blockchain networks are public ledgers, which means anyone can look up your wallet address using a blockchain explorer and see your transaction history and balance. However, they can’t see your personal identity unless you publicly associate it with your address.

What happens if I send crypto to the wrong address?

If you send crypto to the wrong address, the transaction is usually irreversible. Once confirmed on the blockchain, funds can’t be recovered unless the recipient voluntarily returns them. Always double-check the address before sending any transaction.

Can I send one crypto (like ETH) to a different address type (like Bitcoin)?

No, you can’t send one cryptocurrency to a different blockchain’s address. Doing so can result in permanent loss. Each cryptocurrency runs on its own network with unique address formats. To transfer between types of crypto, you must use an exchange or a swap service that handles conversions safely.

Are crypto addresses case-sensitive?

Some crypto addresses may be case sensitive, while others aren’t. The safest method may be to use a QR code or copy and paste the full address exactly as displaced by your wallet rather than typing it manually.

How do I know if an address is valid?

To check if a crypto address is legitimate, start by verifying the format and ensuring that it matches its respective blockchain’s formatting rules. You can also use blockchain explorers or validation tools to confirm if an address exists on a network.

About the author

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.

Photo credit: iStock/AlexSecret

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