> However, if Bank of America had $65M stolen, you could expect them to have other assets to cover that loss and make you whole.

That's exactly my point. Asking some cryptocurrency startup to look after your bitcoin, if they get hacked, they'll probably go out of business and you will lose everything. A major bank, with billions (or even trillions) of dollars of non-cryptocurrency assets, they will survive the theft of a few million (or billion) dollars worth of bitcoin, and have plenty left to compensate you with.

> I think the issue is that would cost a lot of money. Would you be willing to pay 2% of your bitcoin per year for this insurance?

Some people will probably say yes. If you expect bitcoin to go up by substantially more than 2% pa, 2% might be a reasonable amount to pay to reduce the risk of holding it yourself.

> Banks generally have some latitude to undo transactions.

I don't expect banks would apply the same rules to cryptocurrencies given the inability to reverse. For example, if you make a typo in the target account for a bank transfer, with normal currency the bank will probably just reverse it for you if you call them, with bitcoin you've lost your money. The threshold for compensation would be much higher. But still, if the bank loses your bitcoin due to their own negligence (as opposed to your own negligence), they'd be liable for that.