Coinbase, Gemini, and BitGo all claim to carry insurance on customer assets. But how much is actually covered — and what happens when you hold your own keys?
You've got bitcoin. Maybe on an exchange, maybe on a hardware wallet in a drawer. You start wondering: what happens if it's stolen? Is any of this insured?
The short answer is: it depends entirely on where your bitcoin lives. Exchange insurance, self-custody insurance, and institutional custody insurance all work very differently — and the gaps in coverage are much larger than most people realize.
Here's what actually protects your bitcoin, and what doesn't.
Most major exchanges carry some form of insurance on custodied assets. Here's what that typically means in practice:
Exchanges hold most funds in "cold storage" — air-gapped wallets offline. A small percentage (typically 1–5%) sits in "hot wallets" to handle daily withdrawals. Insurance on exchange assets almost always covers hot wallet funds only — the small online portion.
Coinbase Custody Insurance covers digital assets held in Coinbase's hot storage against theft, including employee theft and security breaches. Cold storage assets are not covered by commercial insurance — Coinbase argues cold storage is essentially unbreakable.
Gemini's insurance covers 100% of assets held in hot wallets via a policy with leading insurance providers. Cold storage assets at Gemini are covered by a separate, smaller policy.
BitGo offers up to $250 million in cold storage insurance for institutional clients — one of the largest coverages in the industry. This is institutional-grade custody, not retail accounts.
Key insight: Exchange insurance protects the exchange against hacks of its own systems. It does not protect you against your account being compromised or the exchange going under.
When you hold your own keys — on a Coldcard, Trezor, Ledger, or any other hardware wallet — no exchange insurance applies. You are the custodian. You bear all the risk.
Traditional options have been poor:
AnchorWatch is the most significant development in self-custody bitcoin insurance. They offer insurance specifically designed for bitcoin held in multisig cold storage — covering theft, loss, and destruction of hardware wallets.
AnchorWatch uses a collaborative multisig setup (using Miniscript and Taproot) where they are one of the signing parties. This lets them verify custody arrangements and underwrite risk accordingly. Coverage is available for individuals with meaningful holdings, not just institutions.
For serious self-custodians, AnchorWatch represents a fundamentally new category: insurance that actually makes sense for HODLers who hold their own keys. See our full Bitcoin Insurance overview for more context on why this matters.
If you're a business, family office, or fund holding bitcoin, the insurance landscape is more developed. Several specialized providers underwrite large-scale digital asset custody:
BitGo — The gold standard for institutional custody insurance. BitGo holds a SOC 2 Type II certification and carries up to $250 million in coverage per transaction through Lloyd's of London and other major carriers. Used by exchanges, funds, and corporations worldwide.
Fireblocks — Enterprise-grade custody infrastructure with insurance coverage for assets held in their MPC-based vaults. Used by banks, exchanges, and financial institutions.
Aon Digital Asset Insurance — One of the world's largest insurance brokers has entered the digital asset space. Aon structures bespoke coverage for institutional crypto holders.
Lockton Digital Asset Insurance and Marsh Digital Assets — Two of the largest insurance brokers globally now offer digital asset programs. These are typically for entities holding $10M+ in crypto assets.
Munich Re Digital Assets and Tokio Marine Digital Assets — Major reinsurers backing digital asset policies. They don't sell direct to consumers but underwrite many of the policies above.
Evertas — Specialist crypto insurer founded specifically for digital assets. Offers coverage for custodians, exchanges, and large individual holders.
For bitcoin or crypto held in DeFi protocols (less relevant for pure bitcoin HODLers but worth knowing):
Nexus Mutual — Decentralized insurance protocol. Users can buy coverage against smart contract failures and exchange hacks using $NXM tokens.
InsurAce Protocol — Another DeFi insurance protocol covering smart contract risks and custodial failures.
These are niche products, primarily for DeFi users rather than bitcoin holders.
Here's the uncomfortable truth: the most common ways people lose bitcoin are not coverable by any insurance:
The conclusion: insurance solves some problems but not the core security problem. Good cold storage practices prevent more loss than any insurance policy ever will.
| Factor | Exchange Custody | Self-Custody |
|---|---|---|
| Hot wallet theft | Usually covered | N/A |
| Cold storage theft | Partially/institutionally | AnchorWatch (multisig) |
| Account compromise | Not covered | N/A |
| Exchange insolvency | Not covered | N/A |
| Lost keys | Not covered | Not covered |
| Physical theft | Not covered | Some policies |
| Coverage ceiling | Varies (often low) | Up to AnchorWatch limits |
| Who holds keys | Exchange | You |
If you hold bitcoin on an exchange:
If you self-custody meaningful amounts ($50K+):
If you're an institution or business:
Is bitcoin FDIC insured? No. FDIC insurance covers US bank deposits up to $250,000. Bitcoin is not a bank deposit. Some exchanges hold USD balances (not crypto) in FDIC-insured banks, but your BTC itself has no FDIC protection.
Does Coinbase insure my bitcoin? Coinbase carries commercial crime insurance on assets held in hot storage. Cold storage assets have separate (smaller) coverage. Neither protects you if your personal Coinbase account is hacked through stolen credentials.
Can I insure a hardware wallet? Standard homeowner's insurance rarely covers crypto. AnchorWatch is the most viable option for self-custodians who want real insurance. Some premium home policies can be extended with a digital asset rider.
What happened to FTX customers and insurance? FTX customers received nothing from insurance. The exchange committed fraud — moving customer funds to Alameda Research. Insurance covers theft and hacks, not fraud and misappropriation. This is the irreplaceable argument for self-custody.
Exchange insurance is real but limited — it protects the exchange's systems, not your account or their solvency. Self-custody insurance has historically been a gap, though AnchorWatch is filling it for serious bitcoin holders. Institutional coverage is mature and available for entities that need it.
The most important protection for your bitcoin is still operational: strong security practices, proper cold storage, and good backup procedures. Insurance is the last line of defense. Don't let it be the first.
Browse insurance options:
Related reading: Bitcoin Insurance: The Complete Guide · Bitcoin Self-Custody vs Exchange Custody · Bitcoin Security Best Practices 2026
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