Crypto is still on the rise as investors continue their dealings with this virtual form of currency. In fact, the cryptocurrency cap has reached $2.05 trillion, which is equivalent to the entire Italian economy; the 8th largest economy in the world.
More than 90 billion dollars in cryptocurrency is traded every single day from over 150 countries, hundreds of global spot exchanges, and 120 million Bitcoin transactions. Although there are now 8,000 cryptocurrencies and nearly 5 million NFTs, the vast majority of the daily trading comes from just the top 10 cryptocurrencies.
With all of this crypto moving around and changing hands on a daily basis, there are plenty of leaks where currencies can get lost. Currently, more than 1,500 Bitcoins are lost every day due to three main culprits: missing private keys accounts for 20% of losses, market drops decrease the value of crypto currencies and cause additional losses, and approximately 1 in every 1.5k file losses happen due to crashes or corruption.
Naturally, as with anything in the virtual realm, losses can come from theft as well. In fact, from 2020 to 2021, we saw a nearly doubled rate of crypto theft and illegal acquisition. The COVID pandemic brought on a massive surge in cyber crime, and crypto has been no exception. In 2021 alone, phishing accounted for $115 million stolen; exploitation accounted for $103 million; hacking accounted for $7.4 million; and Ponzi schemes accounted for more than 2 billion dollars in stolen cryptocurrency. The biggest loss of crypto was in 2018 when Christ Larsen lost $44 billion in XRP investment. All this theft adds up to more than 10 million dollars stolen daily.
Considering all the theft and the general tendency toward hesitancy when it comes to virtual money, it’s no wonder that only half of Americans actually trust cryptocurrency and believe it’s safe. Naturally, we’re looking for added security and safety nets before considering investing in crypto.
One solution to the security issues surrounding cryptocurrencies is crypto insurance. The $3 billion (and growing) crypto insurance industry is protecting investors and giving some the assurance needed to dive into the crypto market. The way crypto insurance currently works is that it protects business, but not for personal wallets. Investors can have flexible coverage for only portions of their crypto investments, and the insurance protects businesses against theft, scams, and general losses.
Crypto insurance applies to exchanges, wallets, mining, infrastructure, custodians, payment processing, and financial service platforms, and it all works much like other kinds of insurance. Just like with auto insurance or homeowner insurance, investors find providers and quotes, compare premiums, and choose the specific services they need, which can include fraud insurance, custody insurance, DeFi insurance, exchange insurance, or business crypto insurance.
It’s very clear that crypto is only going to continue growing and that now is the time to get invested in the market. However, with any growth market, the risk of fraud and theft go hand-in-hand with success. Attaining crypto insurance can help businesses to safely navigate the waters with security and confidence.