Investing in cryptocurrency can still seem like a risky venture for many. In fact, only 50% of Americans believe it is safe to do so, and it’s no wonder. The amount of cryptocurrency stolen from 2020 to 2021 nearly doubled, going from 7.8 billion dollars to 14 billion dollars. Phishing, exploitation, hacking, and ponzi schemes amount to these billions of dollars in losses with $10 million being stolen every day.
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The biggest cryptocurrency theft to date was $44 billion in XRP investment lost by Christ Larsen in 2018. Just last year, Maxanaut lost 297 thousand dollars in NFTs. On top of all the theft, which is only continuing to grow, in 2022, we are seeing a loss of 1,500 Bitcoins every day. These coins are lost simply due to things like missing private keys, market drops and crashes or corruption. In fact, about 1 in every 1.5k files will be corrupted with no way of recovery.
Nevertheless, despite the lack of security and common pitfalls in crypto investment, the cryptocurrency market is thriving and continuing to grow. It is now equivalent to the 8th largest economy in the world at 2.05 trillion dollars. We’re seeing an exchange of 91.5 billion dollars worth of cryptocurrency every day, through global spot exchanges, and 120 million bitcoin transactions across 154 countries all over the globe. There are now 8,000 forms of cryptocurrencies and 4.7 million NFTs, but 79% of the global daily trade still comes from just the top 10 forms of crypto.
The Growing Crypto Insurance Industry
The pros and cons of crypto investment need a buffer to balance it all out, and fortunately, crypto insurance provides just that. The growing crypto insurance industry has reached $3 billion and is constantly continuing to grow. It works much like any other insurance in that investors research providers and get quotes, compare premiums, and then decide what needs to be included under their policy umbrella.
Currently, crypto insurance covers businesses, but not personal wallets. It’s flexible to provide coverage for positions of crypto investments and it projects businesses against theft, scams, and general losses. The coverage is applicable to exchanges, mining, wallets, custodians, infrastructure, payment processing, and financial service platforms.
Amid the lack of security nets and safety features in the cryptocurrency market, crypto insurance is given investors the security they are looking for before taking the leap into the growing world of cryptocurrency.