According to cryptocurrency experts, there is an urgent need for improved security. They estimate that theft of wallets, AI frauds, and SIM-swapping will cost more than $2 billion in 2026.
In 2025, billions of dollars of cryptocurrency were stolen in various ways, including exchange hacks, infrastructure attacks, frauds, and wallet breaches, including the Bybit hack taking up huge proportions of losses. The trend has also raised concerns about security practices on exchanges, services, and user wallets as the industry enters 2026.
Security analysts mention a number of new threats that are changing the security landscape of the wallet. Phishing attacks with the help of AI are becoming more advanced, and fraudsters are infecting fake applications with malware and using synthetic media to position themselves as valid projects. Clipboard-hijacking is worming into wallet addresses during transactions, and SIM-swaps have developed into one of the most serious risks of identity-level threats to cryptocurrency holders.
Security researchers who are keeping track of the situation have observed that these new cyberattacks are very sophisticated in comparison with older forms of hacking. Hackers are capitalizing on the fact that a lot of people use mobile phones to hold or manage crypto. They are no longer aiming at the wallet app, but at the mobile device.
Hardware Wallets as the Front Line of Defense
Hardware wallet makers are coming up with more secure ones in order to fight the threats. One of them is the Coldcard Q, which does not rely on a USB cable but can be equipped with AA batteries that will ensure the card is physically isolated from other computers in the network and has little exposure to attacks.
Trezor has also published its new model, Safe 7. It features a bigger screen, and it is more convenient to use to address the requirements of active crypto users. Trezor is an open-source design, based on ten years in the business.
For large investors, there is an increasing trend towards a “multi-layered” approach by experts. This means keeping the long-term storage hardware wallets apart and using more convenient short-term “hot wallets” to use on a daily basis. This lessens risk and makes daily transactions convenient.
New Technology Is Changing How Wallets Stay Secure
In the wallet application, biometric authentication is also trending. Facial and fingerprint scanning provide a greater level of identity verification that cannot be easily breached compared to using traditional passwords. Meanwhile, the long-standing issue of lost private keys is being solved by the arrival of social-recovery wallets that enable the user to recover access via pre-selected trusted contacts or devices.
Another defense created is fraud detection, which employs the use of AI. These systems check transaction trends as they occur and create red flags for anything abnormal, which enables them to detect and stop any hacks before they can cause big losses.
Don’t just pick out a wallet only due to its features, but pick it based on how you generally feel about your security. On websites such as CryptoManiaks, users can learn how to choose a great wallet that would protect against modern threats and yet enable them to keep their own keys.
Mobile Device Security Is Now Essential
Since smartphones are currently used as wallets to carry money, crypto applications require better security within mobile apps. This involves the implementation of more restrictions on what other applications can open.
To prevent attacks, security experts recommend that a user should:
- Restrict the recovery methods of an account
- Minimize access to trusted applications
Hackers will dwell more on mobile access and stealing user identities in 2026. Users will need to take good care of their phones and maintain proper habits of wallet security.
Learn to be very suspicious of prompt messages all the time, and none of the application notification links should be clicked under any circumstances, except in the rarest cases. Also, it is always safe to back out and abort any imminent authorization of DeFi transaction because hoax websites, any of which could strip wallets, are getting more and more common.
What This Means to the Market and What Investors are Doing
The increase in wallet exploits means a greater need for solutions to custody that integrate both security and regulatory compliance. MPC wallets are also gaining the interest of enterprises as they minimize the points of weakness by distributing keys.
To ordinary investors, security practitioners have been sending a very clear message that self-custody without well-enhanced security practices is a grave risk to them. The hardware wallet usage, 2-factor authentication, offline frontier keeping, and unremitting attention to phishing attempts are the key messages promoted in the industry.
Wallet security needs to be improved as the cryptocurrency market keeps maturing. Whether threats will increase or not is not the question the industry has to answer, but whether users and platforms can adapt fast to remain ahead of more advanced opponents.
Disclaimer: This is a paid post and should not be treated as news/advice. LiveBitcoinNews is not responsible for any loss or damage resulting from the content, products, or services referenced in this press release.