Great question by the way, it's always important to think about security and improve your backup systems.
Depending on how secure you want your USB device to be, I'd always recommend
veracrypt for the following reasons (I'll get back to bootable USB after):
- You can then have a secure and simple small file, around 250-500MB, that can store all your private keys, wallet data files, passwords, etc.
- You can make duplicates (multiple backups), put copies on other harddrives, securely upload to clouds, etc. I have over a dozen backups for example.
- Veracrypt is the securest encryption currently know that has passed extensive penetrating audits. It's like locking your keys in a vault.
- Veracrypt is based on the notorious TrueCrypt software, the open-source disk encryption software for Windows, Mac OSX and Linux.
Otherwise, considerations for a bootable flash drive would be to use a lightweight Linux-based live system like
Linux Mint Xcfe, Lubuntu or otherwise, using the default
LUKS encryption SHA256 system encryption, to have access to your assets via bootable USB drive. Although SHA256 is still considered completely secure (it is Bitcoin's encryption after all!), it wouldn't be as secure as Veracrypt, using the
AES-Twofish-Serpent encryption algorithm in combination with
SHA512. Just saying
To be fully
private and anonymous, as well as secure, then you should use veracrypt files along with
Tails operating system, but this wouldn't be necessary for your security imo. There's even the option to have a persistent volume, separate from the amnesic operating system, but I wouldn't recommend it for obvious reasons

Especially if you need to download blockchains to make transactions etc...
Hope that info helps!