Question of centralization faces growing crypto insurance industry
Cryptocurrency markets have been maturing over the last few years, making demand for crypto insurance solutions larger as more advanced players dip their toes into the nascent ecosystem. Investopedia reports that cryptocurrency insurance is seen as a “big opportunity,” with a spokesman from one of the world’s largest insurers, Allianz, saying that the company has explored product and coverage options in the cryptocurrency space as it becomes “more relevant, important and prevalent on the real economy.” The cryptocurrency ecosystem is still seen as dangerous and volatile, where funds aren’t completely secure even on leading cryptocurrency exchanges. While some platforms, including Coinbase, have revealed they have hot wallet coverage via specific insurers, most don’t publicly promote whether assets deposited there are insured. The industry poses specific challenges for insurers. For one, premiums are often defined with the use of historical data, which in the cryptocurrency industry is slim at best and absent in newer areas including nonfungible tokens (NFTs).