In a way, yes – people consider buying Bitcoin to be a gamble because of the volatility of the cryptocurrency. As a financial term, volatility refers to how much the price of an asset changes at a given point in time. A very volatile asset means high risk. This is especially true for Bitcoin, as the value of this cryptocurrency can fluctuate greatly from one day to the next.
Additionally, speculating in Bitcoin (BTC) is similar to gambling in such a way that buying stocks is also gambling. You buy stocks in the hope that sometime in the future the stock will rise in value and your gambling will pay off. However, Bitcoin is not quite the same as traditional forms of gambling such as lotteries or casino games. There are key differences between Bitcoin speculation and pure gambling.
Gambling, but not entirely
In conventional gambling, the “house” always has an advantage; Statistically, players are more likely to lose than to win, especially in lotteries or casinos. Bitcoin differs significantly in this regard. Over the years, Bitcoin has grown in value significantly since it was founded in 2009 by Satoshi Nakamoto.
Bitcoin was only worth a cent per coin when it was launched. Today (January 2021) one Bitcoin is worth USD 31,741.00. However, this climb is far from smooth. Bitcoin has been involved in a number of boom-and-bust cycles. In a notorious incident in 2014, Mt. Gox, the Toyko-based bitcoin exchange, was hacked and a total of $ 460 million worth of bitcoin was stolen. As a result, the value of Bitcoin rose from $ 1,200 to $ 120.
Bitcoin was valued at around $ 20,000 in 2017 and dropped to around $ 3,000 a few months later. As you can imagine, a lot of fortunes have been made and lost in Bitcoin speculation. Anyway, despite its reputation for being volatile, Bitcoin continues to appreciate in value over the years. As a result, investors are always on the lookout for that best cryptocurrency exchange.
The same is not true of conventional gambling. You cannot win over the long term in most types of gambling. You can make a profit here or there, but the odds are not in your favor. The “house” will always win.
The odds can be in your favor
Traditional gambling like bingo, lottery, and casino games give the operator an edge. Players can supposedly beat the house edge by playing with a higher return on investment (RTP) and with a little luck. But no one has ever relied on consistent luck and got away with it. This is why a die-hard gamer almost always loses in the long run.
With bitcoins, the “house” has no advantage. Winners and losers can exist in cryptocurrency trading, but the odds of winning aren’t stacked against you. Basically, nobody knows how BTC will end. Perhaps the 0.5% fee that an exchange can charge for each trade is closest to the house edge in cryptocurrency trading.
This token fee should encourage you to be better than balanced. After all, making a profit is the goal of every business transaction. However, some people can make guaranteed money based on their skills and insights into smart crypto trades. The first step, however, is to learn how to buy bitcoin.
Some games of chance are less volatile
For many people, Bitcoin is more attractive than any form of gambling in the sense that the chance of making long-term profits is much greater. On the other hand, BTC trading is more volatile compared to some forms of gambling. There were times when the value of Bitcoin fell steeply by around 50% and then rose another 50%. Those wildly fleeting days may be long gone; However, BTC is still riskier than trading on the stock exchange.
Where else can you see your $ 5,000 investment drop 20% the next day? Still, BTC had such a reputation and earned the status of a gamer. Therein lies the risk of buying Bitcoin. In contrast, some forms of gambling are far less volatile. Some casino games allow you to have almost a 50% chance of winning, which means that you have an even chance of winning. Not only can you win almost half the time, but the house edge is small.
The other side of the coin, however, is that when it comes to potential long-term income, these casino games cannot be compared to Bitcoin.
Gambling is more familiar
People are more comfortable with the familiar. Bingo, lotteries, and casino games have been around for hundreds of years, while gambling as a whole has existed since hominids first rolled the dice in the Paleolithic. People are more comfortable with playing. They more or less know what to expect and can allocate the money they can afford to lose.
Bitcoin, on the other hand, is alien to the average Joe, because BTC has only been around for about a dozen years, and its reputation as highly speculative doesn’t help. No thanks to Warren Buffett, who essentially referred to Bitcoin as a form of gambling, even after Bitcoin’s value rose 23 times since he first spoke about Bitcoin.
There may be some basis for Bitcoin’s reputation, but people’s fears sometimes border on the irrational, and often the scare tactics come from people who almost don’t understand Bitcoins. Their ignorance of the cryptocurrency drives these fears. So the proverbial average Joe feels a lot safer playing games that he knows and understands.
Less chance of losing your shirt with Bitcoin
Bitcoin is definitely not going to cut it off as a currency. It is not as stable as some major currencies like the euro, US dollar and British pound. Its volatility would make it a terrible global currency at this point. It is this volatility that some opponents of BTC are using to create fears that Bitcoin’s value may soon hit zero. The truth, however, is that you have a far greater chance of losing your jersey playing in the casino than you do in Bitcoin trading.
The house edge would eventually reduce a player’s capital city to zero. If you lose in Bitcoin, you can still save some of your money after losing between 10% and 50% of your initial expenses. The prospect of losing in Bitcoin can dread anyone, but you could still get some of your investments back.
Crypto trading certainly involves gambling, but there are enough differences to set it apart from pure gambling. For example, you can’t just go to a pharmacy and buy a Bitcoin scratch card. Instead, you are given an asset to hold on to and hope that it does later worth more.
If you want to gamble every now and then and risk your money in a new way, Bitcoin might be for you. The rewards are undoubtedly enticing enough. You just have to learn the rules of the game to reap this.
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