You save your coins in the wallet

Regardless of form (soft/hard, hot/cold) and level of security and encryption, what you actually save inside your wallet are NOT your coins but your passwords, private keys, seed phrases, transaction data/ledgers, and the algorithm that manages the encryption and decryption. Your coins are not saved in the wallet, they are stored in the blockchain network and they stay there for a very long time because blockchain is their home.

Your coins remain in the blockchain, and will never leave the blockchain. If you convert them into fiat, you just changed the ownership, you get your cash and the coins have a new owner. Still, they remain in the blockchain. Wallets only protect the KEYS to your COINS. Because wallets control access to your coins.

If the whole blockchain is destroyed, your keys are useless. If your keys are destroyed, your coins are still in the blockchain waiting to be deciphered.

There's nothing wrong in believing that we "own" our coins and it's awesome that we have the sense of control. But we can only do that if we focus the safety on the keys. If you lose the ownership to those keys, your coins stay in the blockchain and will be waiting there to be accessed by somebody else who knows your keys.

Manufacturers and marketers of all kinds of crypto-wallets want you to focus on the idea that "your wealth is in your hands" when in reality your focus should be more on "how to protect your keys," beyond the popular common idea of using hardware or paper wallets themselves. There are many kinds of wallets out there ranging from the typical offline or air-gapped, to the self-destructing kind. Just do your own research.

In these times of bad actors (scammers, hackers, "financial" gurus and the rest of crypto/social influ-w@nkers), the best defense is to be unpredictable. And keep your chosen method secret from the rest of the world. 

Photo credit: WWII Enigma Machine by Mauro Sbicego @Unsplash