The global cryptocurrency market has seen rapid growth in transactions in recent years. With over 8,000 cryptocurrencies in the market, the overall cryptocurrency market cap is set at a whopping $2.05 trillion. According to Insurance Providers, each day over $91.5 billion in cryptocurrency is transacted across 455 exchanges, 154 counties, and 120 million Bitcoin transactions are made.
More and more businesses like Microsoft, Starbucks, Home Depot, and Whole Foods have started accepting payments through cryptocurrency. The reasons are simple they come with lower transaction fees; relatively increased security; nearly instant processing capabilities; and global reach potential.
Insuring Your Cryptocurrency
Not surprisingly only 50% of Americans believe that cryptocurrency is stable enough to invest in. With the increased risks that come with owning cryptocurrency, many are looking towards cryptocurrency insurance where people buy insurance for their cryptocurrencies and Non-Fungible Tokens (NFT).
The global cryptocurrency insurance industry has reached over the $3 billion mark. Cryptocurrency insurance similar to traditional insurance schemes helps to cover transactions, mining, custodial, payment processing, wallets, infrastructure, and financial service platforms.
It provides insurance for businesses but not for personal wallets. With flexible limits, it ensures portions of your cryptocurrency investment and protects against theft, scams, and general losses. For businesses, cryptocurrency insurance can extend your business insurance protection.
Though relatively a new endeavor, cryptocurrency does offer some peace of mind if you happen to be heavily invested in cryptocurrencies and NFTs. With it, you can protect your digital assets, and prevent online fraud and scams on you and your customers.
What’s at Stake When Investing in Cryptocurrencies?
Despite cryptocurrencies being designed to be secure, they come with risks such as getting lost or stolen. It is important to note some risks that come with cryptocurrencies:
- Already in 2020 more than 15,000 Bitcoins are lost every day
- Some 20% of Bitcoins are stranded due to lost wallets
- Drops in the cryptocurrency market also led to Americans losing $1.7 billion in the cryptocurrency markets in 2018 alone.
- File corruptions are also something to look out for with roughly 1 in every 1,500 files that will get corrupted.
- Illicit cryptocurrency acquisition reached $14 billion in 2021 through phishing, exploitation, hacking, and Ponzi schemes.
There are several instances of losses by individuals and institutions over cryptocurrency and NFTs. In fact, more than $10 million in cryptocurrency is lost every day. Some notable crypto losses include the 2018 $44 billion loss in XRP by Chris Larsen, and Maxnaut’s 2021 investment in NFT led to losses amounting to $297,000.
This article, “Can You Insure Your Cryptocurrency?” was first published on Small Business Trends