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Evertas is the first digital asset insurance company. announced Acquired Bitsure, the first crypto mining insurance provider, aiming to expand coverage in multiple jurisdictions.
The firm, which ranks among the few to work with London’s Lloyd’s, partnered with Vitere last month to become a crypto mining underwriter, resulting in a deal with Arch Insurance International. nurture Mining business coverage is limited to $200 million.
Previously, Bitsure offered $5 million in insurance per location with plans to cover more areas of market operations.
The new deal has been hailed by observers as empowering other parties, including mining operations and exchanges, as companies weather the turbulence created by the recession. collapse The impact of FTX and generally poor market principles has driven miners into the woods.
As part of the agreement, Vittere President and Co-Founder Thomas Shuchuk will become Evertus’ underwriting director to leverage Vittere’s mining coverage, which represents 6% of the entire Bitcoin network. became.
Due to the nature of digital assets, providing perfect insurance is no easy task, many operators are left without the desired support, and the lack of deep coverage combined with growth limitations is driving businesses down. Many believe that it is leading to the collapse of
Evertas CEO J. Gudanski pointed out the complexities involved with crypto mining insurance, even though it may look simple on paper.
Market forces, including the underlying assets that are mined, can have a big impact on the value of rigs, which in turn can be a problem for insurers, he said.
“Of all the crypto risks, this one is probably the most familiar to the traditional insurance market. There is a great deal of price variability, which presents unique and novel challenges, which is why it is difficult for other insurers to get used to.”
Miners need insurance companies to survive the winter
Limiting risk is critical to achieving long-term sustainable growth in any sector. Risks associated with digital assets require special insurance to cover the cost of especially sophisticated mining equipment.
Shuchuk explained that the value and profitability of the equipment is affected by the difficulty of mining, with more miners competing in the field and less rewards.
Low income causes miners to abandon projects and sell them at relatively low prices. This puts both parties at a disadvantage as the miner loses the ability to continue operations.
Insurers are in a precarious position because if a major company takes over the mining rigs, there will be more equipment in some locations, further increasing the risks for insurers.
On a more positive note, a perfect union between miners and insurance companies could allow miners to weather the bear market without selling their bitcoin reserves or shutting down operations.