How Much of a Gamble is Cryptocurrency Now?
The online gambling market is huge and worth over $50 billion a year globally with around 1.6 billion regular gamblers. Compare this with the 100 million or so individuals who hold bitcoin currently.
All investments have some element of risk and some are more of a gamble than others. This year will see some big IPOs including Deliveroo, Trustpilot, Chime, PensionBee, Robinhood, and perhaps the biggest of all, NextDoor.
But, even with all these high-profile flotations happening, or about to happen, the biggest talk in the news is about bitcoin still.
This is not surprising when you consider the impact that Elon Musk made when Tesla decided to enter into bitcoin in a big way.
The question for you and any other investors is how much of a gamble is crypto and has that boat already sailed?
The future of bitcoin
There are several cryptocurrencies on the market now including Ephereum, Litecoin, and Binance Coin, but Bitcoin is the biggest and most talked about.
There are only 21 million bitcoins that can ever be mined with over 18 million accounted for. Out of these, 4 million have been lost including 7,500 by James Howells who is offering $70 million for assistance in finding them.
It is possible that once the mining of bitcoins ends the value will continue to rise, and it is this eventuality that many are betting on.
Will bitcoins ever be used in everyday life?
With over 100 million people holding bitcoin and millions of coins still to be mined there are opportunities for businesses to start letting their customers use crypto to make purchases.
Online casinos are already making use of bitcoin and so are sportsbooks. There are some things you need to know before using cryptocurrency in sports betting or casinos though. The main concern is that some online crypto gaming sites are unregulated due to bitcoin not being recognized as legal tender.
If you want to play online in a casino then check the website for their license. After that, you are free to safely play blackjack, poker, and slot machines online.
In Cyprus, there is a bitcoin-only casino and hotel, and Las Vegas is starting to embrace crypto with bitcoin ATMs in several hotels including the D Las Vegas Casino Hotel. Although it is impossible to use bitcoin for gambling in US casinos yet, there are signs that this may change.
Overstock, Xbox Online Store, Home Depot, and Starbucks all accept bitcoin either directly or through a third-party payment method.
How much of a gamble is cryptocurrency now?
If you had invested $100 in bitcoin when it was first launched, you would have received 1000 bitcoins. At today’s value, those coins would now be worth over $60 million. Not bad for a 100 dollar investment. The question for investors now is, can the value continue to rise?
The recent GameStop ‘’ by Reddit users showed the public how easy it could be for certain situations to be manipulated. Bitcoin is not the same as stocks and shares, but it has the potential to be manipulated too.
As mentioned, there are over 100 million bitcoin holders but many will have wallets with barely anything in, some will have lost theirs, and others hold a nice but modest amount. There are, however, a certain number of investors with huge amounts such as the Winklevoss twins from Facebook fame.
If several big holders decided to sell their bitcoins then the value would plummet, they would then be in a position to buy these back again at a lower price. Alternatively, huge purchases push the price up, as was evident in the Elon Musk trade.
Some people might say that investing in cryptocurrency is the same as gambling due to the fluctuations in its value. Crypto can indeed be volatile but there are other benefits to holding Bitcoin or Ephereum.
What are the benefits of crypto?
One of the great benefits of bitcoins is the anonymity it brings. Of course, some people have sought to exploit this advantage for ill-gains as seen in the closure of Silk Road but there are legitimate reasons for wanting to be anonymous.
Hackers target people’s sensitive data, passwords, and financial details so it is vital to stay secure online. Anyone wanting to visit an online casino will want to know that their money and financial details are secure. Bitcoin offers gamblers an anonymous, secure way to deposit funds for playing poker or roulette.
The online retail, gaming, and gambling markets are all growing, and bitcoins might soon be seen as a preferred option for making payments due to the extra levels of security through encryption.
These reasons alone might be enough to convince many to use bitcoin without even considering how the future value might go. There is one other area that investors need to consider when deciding to gamble on crypto, and that is tax.
How does taxation affect bitcoin?
The one thing that hits good investments is tax. If you live in the UK then you will know that any winnings from casinos or other forms of gambling are tax-free. However, US residents are taxed on sports bets, dividends, and gains from selling stocks.
Bitcoins unfortunately are not exempt from tax either. In the US bitcoin is classed as property not a currency and is therefore subject to capital gains tax. How much you pay will be down to how long you hold the coins. Under a year will count as a short-term gain while anything held for over a year will be classed as a long-term gain and is subject to tax up to 20%.
Summary
There are many considerations to think about before investing in crypto. Many people believe that the valuation could continue up to $100,000, $150,000, or even higher, which if true, would make bitcoin a safe gamble.
While you are ruminating on whether to invest in bitcoin you could try out the benefits of it in an online casino and enjoy a few spins of the roulette wheel, or play Texas Hold’em. Who knows, you might make a return on your investment in the casino quicker than bitcoin.
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