The surprising link between the Bitcoin price and crypto insurance
If you type in “Crypto insurance” as a search term into Google you’ll likely be presented with a number of companies who offer policies to insure your crypto in the event of black swan events (such as hacks, exchange insolvency, smart contract failures etc).
But these search results aren’t providing you with an answer to how to protect against volatility - in other words, flash crashes, protracted bear markets or anything that makes the price go down.
If a solution that protects your crypto if the price goes down (but where you don’t lose out if it goes back up again) is what you are really after, then read on...
And if you don’t want to read on… Well, let’s just say the TL;DR is that Bumper’s crypto price protection is probably what you’re looking for!
Most searches for crypto insurance are actually looking for price protection
We’re sure most people searching for crypto insurance are actually looking for price protection, and for that, you’re looking for Bumper.
Why do we think this? Well, the answer is found in the arcane world of data science.
For example, an interesting pattern emerges when you overlay the Bitcoin price chart with the Google search trends for “crypto insurance ”, raising a number of interesting questions… well, they’re interesting if you’re keen to grow the value of your crypto that is.
What this shows, aside from the obvious clear parallels of the frequency of searches, is that as the market cap of Bitcoin (and indeed the whole crypto industry as a whole) increases, the average volume of searches for ‘cryptocurrency insurance’ evidently follows suit.
In other words, as the price of Bitcoin (and therefore the altcoins) goes up, there is more and more interest in crypto insurance. The question is why?
Can we infer whether this increase in searches for crypto insurance are a response to deliberate and nefarious occurrences, such as hack attacks, rug pulls and exit scams, or are users simply looking for a way to protect themselves against natural, market-driven forces… in other words, price?
When Bitcoin’s volatility accelerates, this does seem to ever so slightly precede the correlated trend of searches for crypto insurance, which lends added credence to the thesis that price is indeed the reason for increased search intent for insurance for crypto.
When the price rises, more people start thinking about protection from sudden drops… and the volume of these searches tends to drop off considerably after the price has already tanked.
Of course, when Bitcoin’s price is in excess of $20,000, there is probably a much greater impulse to investigate a method of protecting one’s portfolio than when it was sitting around the $1000 - $2000 mark, and an intra-day drop of even 10% in the price is a far more impactful smackdown of your wallet’s value when the price is higher.
Crypto insurance isn’t sexy, but neither is getting rekt!
To be sure, insurance has never been a particularly “sexy” product. Whether it’s vehicle insurance, home insurance, redundancy, business or liability cover, it’s probably fair to say nobody really enjoys jumping out of bed early to go and get quotes!
The thing is when you search for car insurance or home insurance, you find what you want quickly, because, well it’s a common (and in many cases necessary) product. But does the same apply when you’re searching for crypto insurance? Are you really finding what you actually want - a way to safeguard your net worth from potential dumps?
Did you mean price protection?
Although there are plenty of blog articles entitled ‘how to survive a crypto market crash’, there is unfortunately a distinct lack of actual practical tools and resources which will help you to actually do so.
Headings such as ‘Set a stop loss’, ‘Don’t go all in’, ‘Be patient’ and ‘Use a cold wallet’ make great search-engine-optimised content for clickbait pieces, but for most traders and crypto enthusiasts, these sagely words of advice are practically useless.
And risk management quickly gets complicated, especially when talking about options desks, not to mention the unintended consequences of using stop losses.
Whilst there are insurance services for crypto providing protection from Black Swan events such as stablecoin depegs, smart contract vulnerabilities and custodial risks like exchanges imploding, trying to find a simple solution to protect against volatility is generally about as straightforward as spotting a black cat in a coal cellar.
Perhaps what you are really looking for is “crypto price protection” or even “volatility insurance”.
Either way, if there was only a way to protect the value of your crypto from flash crashes, and those long drawn out declines which we’ve come to expect after major pumps, that would be great.
Fortunately with Bumper, your search is over…
Bumper - not crypto insurance, but probably what you’re looking for!
Bumper is a unique and novel DeFi protocol which protects your crypto from downside volatility. To put it simply, it stops you getting utterly Rekt if the market crashes but still lets you ride the rips to the moon.
Whilst Bumper is not insurance, nor a stop-loss or Options desk, it does share some similarities with functions of all of the above, and it does it in a decentralised and fully transparent Web3 environment.
The whole system is designed to be super simple to use, and has a number of really interesting features. For example, with Bumper, not only can you protect your crypto, but you can also use your Bumpered assets as collateral for loans with virtually zero risk of liquidation, thanks to the baked-in price protection.
There’s no requirement to sign up, or go through onerous identity checks, you simply connect your wallet to the dApp, and you’re ready to use Bumper to protect your crypto from volatility.Want to find out more about Bumper’s unique crypto price protection? Check out the flashpaper here, and come and join the Bumper Discord community to be the first to find out what’s happening.
HIVE COMMUNITY: Come and be a Bumper Beta Tester and earn BUMP rewards (find out more)
