The world of cryptocurrency and digital assets is new, exciting, and completely unfamiliar to most people. While this makes it ripe for innovation and a fast-growing community, it also means that there are risks that are not present in more traditional investments. With crypto insurance, investors can protect their holdings in the crypto world from theft, loss of private keys, exchange failure, and much more.
An insurance policy for your crypto assets can give you peace of mind knowing that no matter what happens with your digital money, you will be protected from the risk of loss. Below are 6 reasons why crypto insurance is not only helpful but necessary for anyone dealing with cryptocurrency.
Reduces risk for investors
Investing in cryptocurrency is a risky business. With the combination of being a new and unstable market, it comes with inherent risk. Many investors are worried about the potential for a hack, theft, and other similar issues. This can be particularly problematic for large investors with high portfolios that would be negatively impacted by such an event. One way to alleviate some of these fears is crypto insurance. Insurance can protect against losses from hacking and other security issues. By utilizing insurance policies, investors can rest easy knowing that if something does happen, they will be covered for their losses.
Legal protection
Crypto insurance provides legal protection for you and your business so that you can feel protected from any legal repercussions that may occur from unlawful use of your cryptocurrency. It will cover you for general illegal activity, such as theft and fraud, as well as any illegal usage of your cryptocurrency activities, such as money laundering or illicit trade.
Peace of mind
Not knowing what the future holds makes it hard to keep your cool when things go wrong. Will I ever see my money again? Will I have any recourse? How quickly can I get back on my feet? When you have crypto insurance in place, you can put these worries aside and focus on taking care of other, more important things.
Encourages investor confidence in the markets
Crypto insurance provides owners with a measure of protection against the risks they face while trading and transacting in digital currencies. This can go a long way toward building trust in the industry as a whole, encouraging investors to view cryptocurrencies as a solid investment.
Helps protect against volatility
Cryptocurrencies are notorious for their extreme volatility. While this can be an exciting feature that makes for good media attention, it can also be a major pain point for those trying to get their money out of the market quickly before they lose it all.
Allows miners and ICOs to remain competitive
Crypto mining has proven lucrative for many people, but it can also be very expensive if there’s no way to insure against hardware failure or other unexpected losses like power outages. For ICOs and other cryptocurrency companies looking for funding through initial public offerings or private sales, insurance is a necessary measure to keep up with their promises and ensure investors will be paid on time.
Conclusion
As cryptocurrencies have become more and more popular, the insurance sector has responded with creative new ideas for protecting your investments. With all the recent scams, thefts, and exchange failures, it’s clear that more people need to be protected from the dangers of cryptocurrency than ever before.
