Bitcoin acceptance is growing, as is the need for insurance cover (Video)

On March 1, Grayscale Investments announced that it had received regulatory approval from FINRA to trade its Bitcoin currency on an electronic platform operated by the OTC Markets Group. Experts believe this could pave the way for more stability in the price of Bitcoin. Here, Ty Sagalow, president of Innovation Insurance Group, discusses recent developments in Bitcoin and its potential risk exposures.

According to Mr. Sagalow, 2014 was “a bullish year for Bitcoins.” Trading volume in increased 57% to over $23 billion. The number of Bitcoin transactions climbed to over 100,000 per day and there are currently 82,000 merchants accepting Bitcoins, including Microsoft, Dell, Dish Networks, Time and Expedia.com. The number is expected to grow to over 140,000 by the end of 2015.

Venture capitalists are also becoming more involved in the Bitcoin market, says Mr. Sagalow. They invested over $335 million in 18 different countries in 2014. In addition, Bitcoins are becoming more accepted as a means to payment for transactions, and the number of Bitcoin accounts (wallets) is expected to grow to 12 million by the end of 2015 – an increase of 4 million.

Mr. Sagalow says Coinbase was the first to announce a fully regulated Bitcoin commodity exchange listed in over 25 states, and regulators, led by NY State, are becoming friendlier to the Bitcoin industry.

The insurance industry, according to Mr. Sagalow, is also getting involved as the new risks associated with the theft of Bitcoin become exposed. In fact, he says a large global insurance company is planning to announce the first Bitcoin theft insurance policy.

For more on Innovations in Insurance with Ty Sagalow, visit the WRIN.tv On Demand Library

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