Bitsurance insures Bitcoin holders against physical attacks

The crypto industry has spent years building increasingly sophisticated digital defenses. Multi-sig wallets, hardware devices, air-gapped signing. But there’s one attack vector that no amount of cryptography can solve: someone showing up at your door with a weapon and a bad attitude.

Bitsurance, a German insurance provider, is now offering coverage specifically designed to protect self-custody Bitcoin holders against physical threats. That includes fire, water damage, burglary, robbery, vandalism, and extortion, the last of which the industry has affectionately dubbed the “$5 wrench attack.” Standard coverage goes up to €100,000, with higher limits available on request.

Why physical attacks are the new frontier of Bitcoin theft

According to CertiK data, wrench attacks surged 75% year-over-year in 2025, with 72 documented incidents resulting in losses exceeding $40 million.

Traditional insurance products were never built for this. Your homeowner’s policy doesn’t cover the Bitcoin stored on a Ledger in your desk drawer. And custodial solutions, while they solve the physical risk problem, require surrendering the very thing that makes Bitcoin appealing to many holders: sovereignty over their own assets.

Bitsurance’s product sits in the gap between those two options. It reimburses users for the market value of lost or stolen Bitcoin without requiring them to hand over their wallet keys. You keep custody. They cover the downside.

How the product actually works

The company, led by CEO Chris Seedor, has built its offering around a partnership model with hardware wallet providers. Bitsurance collaborates with companies like BitBox to pair robust device security with privacy-preserving insurance coverage.

Seedor is also involved with other Bitcoin-adjacent ventures including SEEDOR and Satskeeper.

Right now, Bitsurance operates exclusively in Germany. But the company has announced plans to expand into Switzerland, Austria, and other European markets.

The covered scenarios include: fire destroys your hardware wallet, a flood ruins your seed phrase backup, someone breaks into your home and steals your device, or an attacker physically coerces you into transferring your holdings.

A growing insurance market for a growing problem

AnchorWatch has secured backing from Lloyd’s of London to offer insurance policies against wrench attacks. Their premiums start at 0.55% of the protected BTC value annually.

Evertas is another player working in the crypto insurance space, addressing safety concerns as the asset class matures and attracts a wider range of holders.

What this means for Bitcoin holders

For investors who self-custody meaningful amounts of Bitcoin, the 75% spike in physical attacks creates a risk profile that can’t be addressed by better passwords or more secure hardware alone.

As more insurers enter the space, premiums should face downward pressure. AnchorWatch’s 0.55% annual premium gives us a benchmark for pricing, and competition from Bitsurance and others could push that lower over time.

The risk for these insurers is that attack frequency continues to climb. Underwriting physical threats to crypto holders is a relatively new discipline, and the actuarial data is thin compared to established insurance categories. If wrench attacks continue their current trajectory, insurers will need to reprice accordingly.