Gambling and investing have long been linked. For some, gambling on the financial markets is analogous to gambling on the roulette wheel, and while there are some obvious differences, the level of financial risk coupled with the uncertainty of each bet or trade poses a somewhat closer likeness than many would care to admit. While not always the wisest of strategies for long-term investment, gamblers are increasingly taking advantage of digital currencies like Bitcoin in their gambling, which can often payout more than you think.
Bitcoin casinos are still a fringe element of the online gambling world, but they are becoming increasingly prominent. There are rumours that some of the big names in the industry like Party Casino are entertaining the idea of accepting Bitcoin deposits and withdrawals. Party Casino have stated as a trial run they will limit the games that can be played to only their RNG slot games and if there is enough interest bitcoin deposits will be accepted across all games.
As well as the anonymity, security and convenience Bitcoin casinos offer to some gamblers, there is another key advantage, at the intersection between gambling and investment. But to explore these benefits, it’s firstly important to understand how Bitcoin and digital currencies like it actually work.
The Bitcoin Exchange
When you buy and sell international currencies like the dollar, the euro or the yen, you are either directly or indirectly engaging with the foreign exchange markets – widely termed the ‘forex’ markets. This is the market environment where the true price of currencies, and indeed other assets are established. A currency is only worth what buyers are prepared to pay, and what sellers are prepared to accept. The market mechanism determines this value on a minute by minute basis, and even second by second, to establish the true value of a currency at any given moment.
Bitcoin is a digital, decentralised currency. As such, it isn’t issues by banks or governments, but rather mined, in the form of data strings which represent a unit of the currency. The value of this unit is then determined in an open market environment known as the Bitcoin exchange. This brings together buyers and sellers of Bitcoin to determine the relative value of the currency, in much the same way as any other currency.
Unlike the markets for traditional currencies, the Bitcoin market is incredibly volatile. Its price can shoot up, or swing around even over the course of a single day. This is in part due to the lower liquidity of the Bitcoin market than the major currency markets, as well as the lack of data available to influence the decisions of speculators. However, with the supply of Bitcoin limited, and the options for transacting in the currency ever increasing, it looks set to continue to enjoy strong price growth in the years to come.
What Does This Mean for Bitcoin Gamblers?
The price of Bitcoin is in a constant state of flux. But as a relatively new market that is continue to gain prominence and traction among gamblers as well as the wider web, analysts have projected that the long-term outlook for Bitcoin is value-positive. This means that a Bitcoin bought at today’s prices could, in the months and years to come, be worth so much more than its present value.
For gamblers playing at Bitcoin casinos, the ability to cash out in Bitcoin is like building an investment pot. While major international currencies can fluctuate, the volatility and potential growth still locked inside the Bitcoin market could see the value of your withdrawals increase dramatically over time. Your Bitcoin withdrawals could be worth more than you think, especially if you hold on to them for the longer-term. In this sense, Bitcoin casinos can allow gamblers to compound their winnings, on the assumption that the market price continues to head north.
While Bitcoin gambling still remains somewhat out of the mainstream, that situations is changing rapidly. More casinos are now coming on-stream, supporting Bitcoin as a means of accepting deposits and paying withdrawals. At the same time, more gamblers are waking up to the potential benefits of taking winnings in Bitcoin, in the hope that they could be worth significantly more than their current face value in future.
