A lot of beginner confusion comes from overlapping labels. “Hosted wallet,” “managed wallet,” “exchange wallet,” and “custodial account” are often used to describe a similar idea: a provider runs the wallet infrastructure for you, and you access funds through a login. To sort the terms, use the same key-control check: if you can’t export keys or a recovery phrase and move funds without the provider, it’s custodial.

A hosted wallet (sometimes written as a wallet hosted by a provider) is typically a custodial setup where the service creates the wallet, stores the keys, and handles signing behind the scenes. A managed wallet is a broader term that usually means the provider manages security and recovery for you. In…