2020 has been a strange year for many reasons, and as far as stocks, bonds, and other investments go, it’s been a rollercoaster. Bitcoin is a great example of the unprecedented falls and rises that investments have experienced this year.
In February, it was riding high with a valuation of over $10,000. In March, it saw its value slashed in half, dropping to $5,000 and causing panic across the cryptocurrency sector. Once the dust settled and investors realized that Bitcoin could be a safe haven, it began to rise, eventually climbing above $11,500 in August.
In the last few days, we’ve seen close to 10% wiped off the value since that summertime high, but Bitcoin is still the investment of choice for many in 2020 and that’s having a knock-on effect for the online Bitcoin casino industry.
How Bitcoin Casinos are Profiting
The more Bitcoin investors there are, the more Bitcoin users there will be. It’s a simple formula and it’s one that has seen a surge in demand for Bitcoin casinos.
Bitcoins have a way of drawing you in and making you obsessed. If you start investing in gold, you don’t simply buy a few coins, hoard them in a drawer somewhere, and then forget about them.
You research into coins and bars. You look into numismatics, and before long, you find yourself drawn to stacking videos and obsessing over the price of gold.
It’s the same with Bitcoins, but there are no physical coins to stack or drool over on YouTube videos, and so that obsession turns you into a regular Bitcoin user. You look for places to spend them and use them, and because many Bitcoin gambling sites are available to scratch that itch and give you a chance to earn more, it becomes your industry of choice.
Not only has this led to a surge in player numbers, but those players tend to be richer and more willing to take risks. After all, the average fiat currency gambler bets no more than $50 a month and is reluctant to take risks. They’re “normal” everyday people who aren’t necessarily used to taking risks and just want to play a few games.
By definition, the average Bitcoin user is an investor who is used to taking risks, and in most cases, they are investors that have at least 1 Bitcoin in their possession, which means they tend to have more disposable income and are more willing to bet big.
This simple truth helped to keep Bitcoin casinos alive in the early years, even though they were getting 1/100th of the traffic going through traditional gambling sites.
Bitcoin is popular amongst gamblers for many reasons. Firstly, as mentioned above, it gives them an excuse to spend and use those coins, with the potential for increasing their investment. Of course, it’s gambling, so there is never a guarantee, and in most cases, players will lose their initial investment.
But they’re used to taking risks on currency exchanges so they know that better than anyone.
Secondly, Bitcoins offer a level of anonymity and speed that you can’t get with other currencies. Casinos are not so devoted to the Know Your Customer rules and usually don’t follow them until large withdrawals are initiated, thus saving the player a lot of time and hassle.
It also allows gamblers to bet without linking to their credit cards, debit cards, or bank accounts, which is great for anyone who values their privacy.
There have been many instances of players from restricted countries using Bitcoin gambling sites. They do this by activating VPNs, and it’s possible because the casino can’t trace their location.
However, this is not recommended, because eventually that casino may initiate the KYC protocol and when that happens, the player will need to expose their location and their account may be suspended as a result.
What Does the Future Hold?
Some experts believe that Bitcoins will be worth more than $500,000 in a decade. Others are predicting big growth but are reluctant to suggest that it will grow higher than $100,000 per coin.
The truth is, no one really knows. However, many pre-pandemic predictions were based on the world growing less confident in fiat currencies and on currencies like the dollar devaluing. In 2020, we’ve seen all of that happen.
Not only is the dollar struggling (although it has stabilized in the last few days) but we’re seeing similar issues in Europe, with the pandemic and Brexit potentially leading to a devaluing of GBP and EUR.
Many investors are turning to gold and silver in these troublesome times, but it’s a matter of time before more start turning to Bitcoin and when that happens, we could see the growth that experts have predicted.
Whatever happens, it’s fair to say that Bitcoin, and cryptocurrencies in general, will play a major role for years to come.