Cryptoinsurance, perspectives of an industry with a future

The cryptocurrency industry is in a moment of growth and the outlook is promising for the future in terms of penetration and expansion, as they will be increasingly implicit in all aspects of daily life. Thus, as cryptocurrency markets mature, they attract certain implicit risks in their operation, which represents an area of opportunity for other industries, as is the case of cryptoinsurance.

The last few years have seen an increasing number of hackers in the attempt to steal money from platforms and exchanges; however, wallets are also hacked. For example, in early 2018, cryptocurrencies worth more than $500 million were stolen from the exchange Coincheck.4.

During 2021, a hacker stole about $600 million worth of cryptocurrencies from the Poly Network financial network. Months later, they stole about $150 million from cryptocurrency exchange Bitmart.

However, despite these and other massive thefts many investors keep their assets. In this context, cryptoinsurance becomes indispensable when considering the instability of the cryptocurrency ecosystem.

A promising future

According to experts, cryptoinsurance figures to position itself as an investor favorite in the not too distant future and, in fact, its growth would practically go hand in hand with cryptocurrencies.

The main area of opportunity for virtual currency insurance today is that even the likes of Coinbase, North America’s largest cryptocurrency exchange operator, has only 2% of its coins insured with Lloyd’s of London, so there is a huge potential market.

In early 2020, the corporate entity Lloyd’s unveiled its first insurance policy covering wallets for theft and hacking, which was widely supported by a number of insurers, including Markel. In this regard, companies operating in the cryptocurrency industry often opt for coverage that includes cyber and crime insurance. According to Insurance Journal annual premiums could amount to $10 million for theft coverage.

No doubt setting security standards and risk management are critical to securing profits and protecting the investor. However, if you want absolute peace of mind about your assets, whether they are NFT, token or bitcoin, insurance is the best way to go.