Whether to buy cryptocurrency as a long-term holding may be the biggest decision an investor interested in digital assets has to make, but where to store crypto like bitcoin can become the most consequential.

Following the wildfires earlier this year in California, social media posts began to appear with claims of bitcoin losses, with some users showing metal plates intended to protect seed phrases burnt up and illegible or describing the complexity of recovering crypto keys stored in a safety deposit box in a bank impacted by the fires. While impossible to verify individual claims about fires consuming hard drives, laptops and other storage devices containing so-called hard and cold storage crypto wallets and seed phrases, what is certain is that bitcoin self-custody presents a unique set of security issues. And those risks are growing.

Holders of crypto typically use some form of what can be called a “wallet,” and there are a few main features – whether that wallet is connected to the internet, and how much control is directly embedded in the wallet for trades and transfers. There is also the underlying issue of whether a crypto investor uses a third party for custody at all, or maintains total custody and trading control over their holdings.

The standard third-party platform “hot wallet” – think of an offering from a Coinbase or Blockchain.com – is constantly connected to the internet. Cold storage and “cold wallets,” on the other hand, include hardware devices (like a USB stick) that holds private keys offline, or even just a seed phrase (a master recovery code, a collection of 12 to 24 words used to recover access to a crypto wallet) on paper/metal. Hardware wallets or offline backups of seed phrases can be used to access crypto when connected to the internet through another device.

With third-party custodial options, there are steps to help owners remain vigilant against the threat posed by cybercriminals who can gain access to an internet-connected platform, including the use of two-factor authentication, and strong passwords. The U.S. Marshals Service within the Department of Justice, which is responsible for asset forfeiture from U.S. law enforcement, uses Coinbase Prime to provide custody for its seized digital assets.

Many crypto bulls prefer to self-custody digital assets like bitcoin for some of the same reasons they are interested in cryptocurrencies to begin with: lack of faith in some forms of institutional control. Custodial wallets from crypto brokers trade convenience for the risk of exchange hacks, shutdowns, or fraud, as in the case of the high-profile implosion of FTX. And the wildfires are just one example in a recent string of global events that raise more questions about shifts in the crypto custody debate. There is the ongoing conflict in the Middle East and Russia-Ukraine war, which has led crypto bulls from overseas to re-think their approach to self-custody.

Nick Neuman, co-founder and CEO of self-custody company Casa, said physical risks in the world like a natural disaster are an opportunity to revisit how bitcoin security works, and the common security lapses folded into most peoples’ practices. “Most people secure their bitcoin with one private key. If that key is on a single device or written down on paper as a seed phrase, it’s a single point of failure. If you lose that key, your bitcoin is gone,” he said.

It should be obvious that keeping seed phrases on paper offers the lowest level of protection against fire, yet it is common practice, Neuman said. Slipping these pieces of paper into fireproof bags or safes offer some protection, but not much, and even going the extra steps to have the seed phrases on “indestructible” metal storage plates presents a few failure points. For one, they might prove to be not so indestructible, and second, they may be impossible to locate amid the rubble. 

“Logically, given the location of the fires in California and the stories being shared on X, it’s highly likely bitcoin was lost,” said Neuman. “Some of them are pretty convincing,” he said.

Casa performs annual stress tests on seed phrase backups.

Some self-custody services, like Casa, offer multi-signature setups that reduce the risks of single-point failure. A multi-key crypto “vault” can include mobile phone keys, multiple hardware keys, and a recovery key that a company likes Casa holds on an owner’s behalf.

The multi-sig custody approach allows an owner to hold a majority of keys while a trusted partner holds a minority of keys. John Haar, managing director at Swan Bitcoin, says that in such a setup, the owner would need to lose all the physical devices and all copies of the seed phrases at the same time. As long as the owner can access at least one device or one seed phrase, they would be able to recover their bitcoin. This approach should significantly limit the potential for all of the devices to be lost in an event like a natural disaster, Haar said.

“You can spread these keys across multiple regions or even countries, and you need any three of the five keys to approve a bitcoin transaction,” Neuman said of Casa’s five-key approach.

Jordan Baltazor, chief administrative officer at Fortress Trust, a regulated crypto custodian, says best practices that we use in other areas of personal life should apply to cryptocurrency. For one, diversification of storage approach and weighing of risks. Digital assets are no different, he says, when it comes to backing up personal and sensitive data on the cloud to ensure data against loss or corruption.

Companies including Coinbase and Jack Dorsey’s Block offer products that try to merge some of these ideas, creating a more secure version of a crypto wallet that remains convenient to use. There is Coinbase Vault, which includes enhanced security steps before a user can access crypto holdings for trading. And there is Coinbase Wallet and Block’s Bitkey, which have mobile apps that work like a traditional wallet making moving bitcoin around easy, but with the ability to pair with hardware wallets and added security more commonly associated with cold storage.

Bitkey hardware requires multiple authorizations for transactions for added security, similar to “multi-sig wallets.” Bitkey also offers recovery tools so one of the biggest risks of self-custody — losing codes or phrases needed to recover a cold wallet — is less of an issue.

Solutions like Dorsey’s may help to solve the tension between convenience and security; at minimum, they underline that this tension exists and will likely be something of a roadblock to more widespread crypto adoption. Beyond the risks out there in the form of wildfires, all kinds of natural disasters, and wars, bitcoin self-custody can be vulnerable to the biggest personal risk of all: unexpected death of the bitcoin owner. There is arguably nothing more complicated than inheritance when it comes to unlocking the crypto chain of custody.

Coinbase requires probate court documents and specific will designations before releasing funds from custody, while physical wallets offer little to no support, potentially leaving all that digital value stuck on a private key. Bitkey rolled out its inheritance solution in February for what a Bitkey executive called, “kind of a multibillion-dollar problem waiting to happen.”

“People who have a material investment in bitcoin absolutely need to be thinking differently about how to protect it,” Neuman said. He says that after disasters like the California wildfires, or when exchanges go bust like FTX, the industry does see more crypto holders taking action to move to more secure storage setups. “I suppose it’s human nature to wait until ‘bad things happen’ to spur action to improve your own personal situation,” he said. “But I think people would be better off if they were more proactive. Otherwise, they risk having that ‘bad thing’ happen to them, and then it’s too late,” he said.

‘Cave rapidly’

Elon Musk has been promising investors for about a decade that Tesla’s cars are on the verge of turning into robotaxis, capable of driving themselves cross-country, after one big software update.

That hasn’t happened yet.

What Tesla offers is a sophisticated, but only partially automated, driving system that’s marketed in the U.S. as its Full Self-Driving (Supervised) option, though many Tesla fans refer to it as FSD. In China, Tesla recently changed the system’s name to “intelligent assisted driving.”

Full Self-Driving, as it was previously called, relies on cameras and software to enable features like automatic navigation on highways and city streets, or automatic braking and slowing in response to traffic lights and stop signs.

Tesla owner’s manuals warn users that FSD “is a hands-on feature” that requires them to pay attention to the road at all times. “Keep your hands on the steering wheel at all times, be mindful of road conditions and surrounding traffic,” the manuals say.

But many of Tesla’s customers ignore the fine print and use the system hands-free anyway.

Tesla’s partially automated driving systems have been a source of inspiration for its stalwart fans. But they’ve also caused controversy and concern for public safety after reports of injurious and fatal collisions where Tesla’s standard Autopilot or premium FSD systems were known to be in use.

FSD does a lot of things “amazingly well,” said Guy Mangiamele, a professional test driver for automotive consulting firm AMCI Testing, during a recent long drive in Los Angeles. But he added that “the times that it trips up, you could kill somebody or you could hurt yourself.”

The pressure has never been higher on Tesla to elevate the technology and deliver on Musk’s long-delayed promises.

The Tesla CEO is the wealthiest person in the world and was the biggest financial backer of President Donald Trump’s 2024 campaign. Since Trump’s January inauguration, Musk has been leading the administration’s Department of Government Efficiency effort to drastically slash the federal workforce and government spending.

The DOGE team has been connected to more than 280,000 layoff plans for federal workers and contractors impacting 27 agencies over the last two months, according to data tracked by Challenger Gray, the executive outplacement firm.

Musk’s work with DOGE – along with his frequently incendiary political rhetoric and endorsement of Germany’s far-right, anti-immigrant party AfD – has led to a tremendous backlash against Tesla.

Protests, boycotts and even criminal acts of vandalism have targeted the electric vehicle maker in recent months and led many prospective Tesla customers to turn to other brands. Meanwhile, existing Tesla owners have been trading in their EVs at record levels, according to data from Edmunds.

Tesla’s stock dropped 36% through the first three months of 2025, representing its steepest decline since 2022 and third-biggest slide for any quarter since the EV maker went public in June 2010. Tesla also reported 336,681 vehicle deliveries in the first quarter of 2025, a 13% decline from the same period a year ago.

Product unveilings and a “robotaxi launch” expected from Tesla in Austin, Texas, this year could revitalize investors’ sentiment about the company and hopefully lift its share price, Piper Sandler analysts wrote in a note following the worse-than-expected deliveries report.

On Tesla’s last earnings call, Musk promised investors that Tesla will finally start its driverless ride-hailing service in Austin in June.

To see whether the company’s FSD technology is anywhere close to a robotaxi-ready release, CNBC spent months riding along with Tesla owners who use Full Self-Driving (Supervised) and speaking with automotive safety experts about their impressions.

Auto-tech enthusiast and Tesla owner Chris Lee, host of the YouTube channel EverydayChris, told CNBC that Tesla’s system “definitely has a ways to go, but the fact that it’s able to go from where it was three years ago to today, is insane.”

Many experts, including Telemetry Vice President of Market Research Sam Abuelsamid, remain skeptical. There’s been “no evidence” that FSD is “anywhere close to being ready to be used in an unsupervised form” by June, said Abuelsamid, whose firms specializes in automotive intelligence.

Tesla FSD will “often work really well, particularly in daytime conditions” but then “randomly, in a scenario where it did fine previously, it will fail,” said Abuelsamid, adding that those scenarios can be unpredictable and dangerous.

Watch the video to learn more about the evolution of Tesla’s Full Self-Driving (Supervised) and whether it will be robotaxi-ready this June.