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 surge 300% week-on-week and it’s still growing, Tetek reported, adding that the current sales are higher than a year ago when Bitcoin reached its all-time highs at $68,000. Trezor 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.”
According to the executive, Trezor is able to satisfy current levels of demand in the short to medium term. “Even if sales continue at this elevated rate, we are confident there would be a limited impact on our stock in the longer term, as we were already planning for an uptick in sales,” Tetek said. He also noted that Trezor doesn’t plan to increase the prices for its hardware wallets in line with its vision to make “self-custody accessible to all.”
Despite the spike in demand and the associated increase in support requests, Trezor isn't planning to expand its hiring. “We did not have to downscale as we were prepared for a prolonged and deep bear market,” Tetek stated, adding that Trezor currently employs a total of 100 people working in multiple locations, with the majority based in Prague.
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 sharp surge in demand for its devices recently as well. Ledger CEO and chairman Pascal Gauthier told Cointelegraph that new account creations on Ledger live increased 6x, with users actively moving funds to their devices, adding:
"The message is clear: people are realizing that we must return to decentralization and to self-custody. Not your keys, not your coins."
As previously reported by Cointelegraph, the spike of Ledger activity came shortly after FTX stopped all crypto withdrawals last week, which triggered investors 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 exist, which is great,” the CEO said.