Will Cryptocurrency Take Over Online Gambling?
Despite those often mainstream institutional critics, cryptocurrency has gone on to establish itself as at least a viable asset class, in addition to creating countless millionaires from so-called ordinary investors. Not without its controversy, few could deny that cryptocurrencies look set to play an increasing role in the financial system of tomorrow.
For some of the critics, cryptocurrency is equivalent to gambling, pure speculation by investors hoping their lucky numbers come up. But does this viewpoint stand up to scrutiny? And if cryptocurrency investment and gambling aren’t necessarily the same thing, could the rise in demand for crypto trading take over from online gambling as the financial entertainment of choice for those with money to play with?
Is Cryptocurrency Investing Gambling?
Investing in cryptocurrency shares some of the same characteristics as gambling, so it’s not hard to see why people link the two. Firstly, the aim of the game in both cryptocurrency investing and gambling is to make money, and there’s always personal money at risk. The future is uncertain in both cases, and participants use their best skill, judgement and good fortune to their advantage in maximising any possible return. But despite the similarities, there are obviously some significant differences between the two.
When you gamble, you’re not buying an asset, and you’re not subject to the forces of the market. If you spend £200 spinning your favourite slots games, you might lose £200, of win £200,000. But whatever the outcome, it’s internal to your game. You’re playing the game, you’re taking your chances, it’s all on you, win or lose. With investing in any asset, it’s the market that decides how successful you’ll be, and that’s not a random variable.
This is perhaps the key difference. While it’s difficult to read or interpret the cryptocurrency markets let alone predict them, there is some degree of predictability in cryptocurrency analysis that doesn’t exist with gambling. In this sense, cryptocurrency can be considered an investment rather than a form of gambling, in spite of the common features they share.
It’s worth noting that in both cases, there is significant risk. While some asset classes like traditional commodities and fiat currencies are more stable, it’s the high risk/high return nature of cryptocurrency investing that has fuelled the explosion in its popularity in recent months.
The Rise and Rise of Cryptocurrency
To describe cryptocurrency as a phenomenon would probably underestimate just how successful these digital currencies have been. From a fringe interest amongst computer geeks only several years ago to a mainstream topic of everyday discussion, bitcoin and other cryptocurrencies such as the casino specific FunFair token have clearly captured the imagination. Multiple billions are flowing into the crypto markets as investors from all backgrounds leap to take their positions, as prices rise and then rise some more.
Some analysts have urged caution, and others have called it a bubble. But there’s no denying that cryptocurrency has been growing into something of a big deal. With more coins being launched seemingly every day, and new applications of the underlying blockchain technology, it’s looking as if cryptocurrency and digital tokens might just be the future.
A large part of the attraction is the astronomical gains, and cryptocurrencies across the board are capable of posting annual growth rates in the hundreds or even thousands of percent. With returns like this, for as long as they last, investors are more than likely going to want to continue to get involved.
No Takeovers Here
For all that cryptocurrency has become the hottest topic in investing, it is unlikely that it will ever take over from online gambling. While gamblers might naturally be drawn to the speculative potential of currencies like bitcoin, it serves a different need. People don’t gamble as an investment in most cases – but with cryptocurrency, you can treat your holdings like an investment, and you are taking stock of a valuable asset in exchange for your fiat investment – this is an asset, whether the mainstream banks like it or not.
Then there are the pure demographics. While both online gambling and cryptocurrency investing are popular, there is not an exact crossover in the audiences, nor a limit on how much individuals might choose to spend or invest respectively. For this reason, it’s possible easily possible that cryptocurrency and online gambling can co-exist, without cryptocurrency eating up any sizeable part of the gambling industry.
For the time being at least, it looks certain that despite the successes of cryptocurrency so far, there will be no takeovers here.
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