Crypto insurance as a solution if you are afraid of losing
Crypto insurance as a solution if you are afraid of losing - Crypto is one of the assets that the younger generation likes to collect now. Some even think crypto investing is cooler than stocks. Investing in crypto includes high-risk investments, some investors think of ways to reduce the risk. However, is crypto insurance the right answer?
Why Is Insurance Important?
Crypto insurance provides protection
against the loss of tokens. Crypto insurance is different from insurance in
general such as health and life. The scheme is also unique in that crypto
itself is not legal tender and the factors affecting it are also different from
other investment assets. The factors that influence crypto are volatility,
hacking, and fraud.
Volatility
The volatility of crypto is very unreasonable. Within a day, crypto can rise by more than 100% while stocks are limited to 24%. This volatility could also be influenced by many sentiments including Elon Musk's Twitter tweets. Although many people have a dilemma against this volatility, the drastic increase in price makes people interested in getting into crypto.
Hacking
Many crypto hacking cases occur. One that happened in March 2022, when USD540 million worth of crypto was stolen from the ronin project. It is difficult to overcome crypto hacking because it cannot block personal accounts. In other words, it requires a private key from its hackers. Even if knowing who the hacker is, there is not much that can be done.
Deceit
According to a June 2022 FTC report, more than 460,000 people reported losing more than 1 USD billion in money from 2021 - 2022. The case of fraud in crypto is quite serious. A large number of asset loss factors provide an opportunity for the insurance company to grow.
How Do Crypto Insurance Companies Help?
Most crypto insurance companies target crypto-related businesses. Some of the exchanges that insure assets are Coinbase and Gemini. One of the leading crypto insurance companies is Lloyd through his broker Superscript provides protection against crypto.
Superscript says that the first layer of protection will protect businesses from a variety of risks, including ransomware attacks, cyber business intrusions, and professional negligence. Layers for directors and officers, trustees, and miners will be launched later.
There is no crypto insurance that provides direct insurance coverage to consumers. Not all wallets are insurable. Protection is in the form of payment of money according to the level of protection purchased in the wallet. It should be noted that insurance protection applies only to 20 types of coins and only in America.