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How The Volatility of Cryptocurrencies Affects Gambling
The cryptocurrency revolution and the rise of online gambling feel like a match made in heaven. Both of these have become dominant forces on the internet in recent years, and as such, it was only a matter of time before their paths crossed. However, anybody who follows or invests in the crypto market will know that the last few months have been quite the rollercoaster. The volatile nature of cryptos affects gamblers, crypto casinos and bonus offers alike. In this blog post, GoodLuckMate dives deeper into how the volatility of cryptocurrencies affects gambling online.
Cryptocurrencies and Casinos - A Match Made in Heaven
Cryptos and casinos have been on somewhat of an upward trajectory, especially over the last three years. The idea of anonymous payments, fast transactions, pay and play options, and lack of a third-party intermediary were always going to be attractive features for gamblers.
Many mainstream industries have toyed with the idea of accepting cryptocurrencies. Still, few have embraced it quite like the online gambling world. A lot of crypto casinos have popped up in recent years. Now, given the well-documented volatility of cryptos - is this necessarily a good thing?
One thing that is not being discussed though is whether or not it’s a good idea to use cryptocurrencies for gambling in general. Let’s do a quick history check for those who are not up to speed. Bitcoin was the first cryptocurrency and it was invented back in 2009. It didn’t really catch too much attention until 2013. That was when its value rocketed and it then regularly began to set all-time highs. In April 2021, it reached a record of just over €53,000! Some experts even believe it will recover from its recent crash to hit 100k by the end of the year.
Double the Risk?
In many ways, players who gamble with cryptocurrencies are gambling twice in one go. Some casinos are also taking similar risks. The value of cryptos changes on such a regular basis that a deposit that was worth €100 one day could easily be worth double that a day later.
However, the opposite of this can also be true. Dogecoin, the meme coin made popular by Reddit and Elon Musk, suffered a 45% drop in less than 24 hours in May. This loss of value means you could theoretically deposit cryptos at a casino, win some funds, and then withdraw a day later but end up being down in fiat currency and value.
Difficult to Manage the Bankroll
For most serious gamblers, this presents a few issues. Bankroll management is key to being successful at gambling. But, if the value of your bankroll changes every day, then managing it effectively can be extremely difficult.
It can also present an issue for casinos when it comes to creating bonuses and offers. The idea of a bonus is to attract customers to your product. If you tell players to stake 10 Dogecoin to receive a bonus, then the value skyrockets overnight, people are going to be more hesitant. As a result, most crypto casinos tend to keep their bonus requirements very low. Also, the casinos tend to use more reliable coins, nevertheless, it is always a bit of a risk.
A More Stable Form of Gambling?
So, what does the future of crypto-gambling look like? Well, presuming that crypto sticks around, the industry will no doubt adapt. One option that is becoming popular for gamblers is the use of stablecoins. Unlike other cryptos, these are tied to a real-world asset such as the dollar. This keeps their value, as their name suggests, stable.
The biggest benefit of stablecoins is that it still manages to maintain the advantages of using a cryptocurrency in the first place. It just removes the volatility. Another option that some casinos may look into, especially when it comes to bonuses and promotions, is the use of tokens. These give players the option of trading their cryptos for an asset worth a specific value at the casino.
Whatever happens, cryptocurrencies are here to stay. There are surely going to be plenty of teething problems. Still, on the whole, most gamblers and experts see cryptocurrencies as a positive change, although the jury will still be out for some time.