Understanding crypto value when gaming online
Cryptocurrency offers excellent appeal as a payment option in online gaming.
Cryptocurrency offers several advantages, hence, the growing popularity of the sector. Digital coins are slowly gaining acceptance among consumers, which has made them viable payment alternatives in different areas. Internet gaming is one of the biggest adaptors of crypto because decentralized currency provides fast, cost-effective, and anonymous transactions. However, digital coins are not without disadvantages, and the fluctuating value is the most prominent one.
Since digital currencies entered the market, they have had unstable price performance. By design, cryptocurrency is highly volatile, with prices rising and falling constantly. In early 2021, Bitcoin reached its highest value then lost almost half of it in weeks. Why is this important? When gambling, your bankroll can gain or lose value depending on how a particular coin fairs on the market. Therefore, gamblers should learn more about cryptocurrency volatility so that they know how to proceed.
Cryptocurrency and Online Gaming
Playing with digital coins is only slightly different from using fiat currency. Rather than depositing and withdrawing funds via cards, e-wallets or cheques, players use crypto. Gaming with digital currency is still a new concept, and only a few operators provide the option. Bitcoin is the most widely accepted coin due to its market dominance. However, as an increasing number of casinos get into the crypto business, players have more payment alternatives.
Ripple, Litecoin and Dash are some of the altcoins available for online gaming. Once you learn how to use one coin, you can play with others without any problem. So, you can check out Ethereum casino reviews on Casino.Guide to get an idea of how cryptocurrency payments work.
The biggest distinction between fiat and digital currency is that the former will always have a fixed value. Gambling is already risky, what difference does it make if you are playing with a volatile currency? It complicates money management. Say you set aside 2 BCH (Bitcoin Cash) for casino games. If the process is $510, then that would mean that your budget is $1000.
Now, if the currency lost value to $300, it would mean that you have less to gamble with for the same 2 BCH. Conversely, the value could rise, leaving you with more spending money than you had. In any case, volatility can throw your gambling off balance.
What Affects Volatility?
The price fluctuations in cryptocurrency depend on several elements. Traditionally, supply and demand dictate how currencies perform, but digital coins move differently.
A Young Resistance Level
One aspect that impact volatility is the small sample size of cryptocurrency. Bitcoin was the first digital coin to hit the market in 2007. Various other altcoins came along later, and now the market has over 1,000 alternatives. Despite the upward trend of crypto development, it remains a young asset. For this reason, digital currency hasn’t established a full resistance bottom.
Assets with well-developed price performances, such as stocks, tend to move gradually. The result is that it becomes difficult to assign a price above zero to individual units. In comparison, conventional assets have fundamental prices to fall back on, even when their value drops.
Impact of Bad News
Digital currency is highly susceptible to news and current events. It’s not to say that conventional assets are not affected by bad news. You have seen stocks falling after negative information about a particular company came out. Crypto reacts the same way. However, it is triggered by the slightest provocation.
A good example is when Tesla’s CEO, Elon Musk, announced on Twitter that his company would not accept Bitcoin because the coin’s mining process is not environmentally conservative. This news saw Bitcoin stumble in value. Another instance is when Musk started tweeting positively about Dogecoin, which led to the currency’s slight increase in price.
One reason news has such a dramatic effect is that cryptocurrency has yet to gain complete consumer trust. The more users are confident in an asset, the stronger it is. Bad news leads to a selling frenzy because currency holders don’t want to have worthless coins if things don’t work out. Similarly, if good news breaks about a particular coin, consumers run to acquire as many as they can, thus, causing a price increase.
Cryptocurrency is decentralized, meaning that no bank, government or other institutions have any input about how it works. This trait is part of its appeal. When digital currency was first discovered, no one paid much attention since it looked like a fad. However, in the past decade, it has become clear that crypto coins ate here to stay. As consumers started embracing digital currencies more over time, governments began to notice.
Now, different countries have regulations about cryptocurrency use. Some regions have made it illegal, others allow certain transactions, while the rest still don’t have any specific laws. As institutions apply increasing pressure on how to use digital currencies, the market reacts poorly. The stricter the regulation, the lower the value falls. Since Bitcoin has the widest market distribution, it is the most affected by institutional decisions. Altcoins tend to fall right in line with Bitcoin’s performance.
Dealing with Volatility
Regular use is the best way to handle crypto market volatility. Familiarity helps currency holders get comfortable, the same way you don’t check the value of the Euro or US Dollar when buying items. Increased coin use leads to higher circulation, and that has a positive effect on the value. The more people transact with cryptocurrency, the more confident the market gets. So, gambling with digital currency contributes to decreased volatility.
Cryptocurrency gambling still has a long way to go, but the market is doing well so far. The number of casinos that accept crypto is rising. Gambling with digital coins reduces some safety risks because you don’t have to provide any sensitive details during transactions. You only need the sender’s and recipient’s addresses to transfer funds. Due to the absence of a third party, crypto has low fees, which boosts your bankroll value. Remember to watch out for the markets to get an idea of how to manage your funds for maximum advantage.
Cryptocurrency offers excellent appeal as a payment option in online gambling. However, currency holders should know more about price volatility before using any particular coin. Understanding how the market works should make it easier to get the most out of your crypto gambling experience.