Crypto hacking losses have averaged 0.24% of market capitalization annually since 2018, ARK Invest digital assets research head Lorenzo Valente said, arguing that businesses may pass some costs on to customers.
Valente put fraud-related losses in U.S. bank deposits at 0.017%, making the crypto rate about 14 times higher by percentage. The crypto figure is an annual average dating back to 2018, rather than a measure for a single year.
The percentages use different bases: crypto losses are measured against total market capitalization, while bank fraud losses are measured against deposits. The 14-to-1 comparison therefore describes relative rates, not a dollar-for-dollar comparison of total losses in the two systems.
Valente’s argument is that the cost of a hack may extend beyond the stolen assets. He compared the possibility to retail theft, where a business may try to recover losses through the prices it charges. If crypto businesses take a similar approach, customers could bear some of the cost even when their own assets were not stolen.
A separate company response to breach losses appears in EconoTimes’ report that Binance set aside more than $6.34 billion to cover breach losses. That report concerns one company’s allocation; Valente’s figures compare industry hacking losses with market capitalization and U.S. fraud losses with deposits.
Valente also argued that hacks weaken crypto networks’ competitiveness.
