The truth remains Bitcoin and crytocurrencies in general will someday all be regulated by Gov., or investors are likely to see there money disappear in a flash.
This kind of danger will simply be avoided if trader will never leave their asset on exchange for a long time and use non custodial wallet to store their assets. Regulation is inevitable but don’t rely too much on it for your own asset protection because you will still suffer losses once exchange file bankruptcy since only part of the original money will be covered by the insurance.
You have a valid point here, the insurance only covers half of your loss and very few people understand the concept of insurance in crypto.