Over the last few years, millions of people worldwide have been investing in cryptocurrency. A few of the most popular cryptocurrencies, like Bitcoin, have tens of millions of active accounts. However, these new digital financial markets are just as controversial as they are popular. Some investors claim crypto is the future of modern money, while others (including Warren Buffet) are staunchly opposed to Bitcoin, citing its high volatility and lack of central bank regulation.
Whether they invest in crypto personally or not, most financial experts agree that even though digital currency has been taking some big hits in the past few months, the world of cryptocurrency trading is only just beginning. If you’ve invested in digital currencies, it can be easy to get caught up in the rise and fall and hustle and bustle of trading and investing.
Just as speculative investments and stock trading draw problem gamblers, there are also potential issues with problem gamblers and crypto trading. Is trading or investing in crypto considered gambling? Learn more below about the differences — and similarities — between them.
Crypto Investing and Gambling: The Differences
Crypto investing and gambling have a few marked differences. Here are some of the main ones that differentiate the two from each other:
Crypto Isn’t Entirely Up to Chance
When purchased wisely, cryptocurrency has the potential to serve as an effective investing strategy, especially as part of a diversified portfolio. Meanwhile, gambling is almost always up to chance. Because the chances of winning a significant amount of money are so minuscule, gambling by its very nature is extremely unlikely to result in long-term profits. If given a choice between the two, even the most cautious financial advisors would likely recommend investing in crypto assets over playing slot machines or buying lottery tickets.
Different Rules and Regulations
One of the problems with crypto trading is that it’s unregulated by nature. Buying crypto means that you are trusting money that is essentially “imaginary” since it isn’t federal reserve currency like cash (which is backed by gold). Many trading platforms have no regulations at all, and in the case of a scam, you’re unlikely to get your money back or be able to open a criminal case.
Even though gambling can be dangerous for some individuals, it is different from crypto investing because it is more regulated. There are statewide and federal regulations controlling online gambling, interstate gambling, and sports betting, along with “games of chance” and “games of skill.” However, if you spend your hard-earned cash at the casino, you still can’t file a police report if your robber was Lady Luck.
Crypto Investing and Gambling: The Similarities
Unless you’re attending a cryptocurrency casino, we don’t believe that investing in cryptocurrency is (by itself) a form of gambling. However, there are some alarming similarities to be aware of, especially if you’re susceptible to problem gambling.
In both crypto investing and gambling, you can be preyed upon for your naivete and hopefulness. Every casino dealer will tell you that you just need to play one more round, then you’ll really win! Similarly, your favorite influencer or celebrity recommending the newest altcoin on the block will tell you that this is your ticket to riches. Not knowing any better, you sit down at the blackjack table or invest a few hundred dollars into the latest cryptocurrency, only to be robbed blind by a pump-and-dump coin scam or a dealer who knows that the house always wins. If something sounds too good to be true, it usually is, especially if someone wants your money in exchange for that something.
The Lows and the Highs
When crypto prices rise or a gambler wins money, the “high” feels worth all of that risky spending. This can lead to a pattern of pathological behavior in which the person “chases” the dopamine their brain releases during the high. Since our brains need novelty, the stakes continue to elevate until a fixation or full-blown problem behavior develops.
Uncertainty and Volatility
Cryptocurrency’s long-term future is unknown, and prices are almost impossible to predict. Therefore, investing in any kind of digital currency, whether it’s Bitcoin, Ethereum, or an “altcoin,” means dealing with the constant stress of rising and falling crypto prices. Similar to how pathological gamblers feel that just one more spin of the wheel will net them the jackpot, those entrenched in crypto can convince themselves to invest more money or not pull out their funds even as their wealth crashes and burns. Both people are trusting an uncertain, volatile system, and both have the deck stacked against them — even if it’s in different ways.
Call 800-GAMBLER For Confidential Help Anytime
If you are dealing with pathological gambling behaviors, including excessive crypto speculation, make the right choice and call 1-800-GAMBLER. Our toll-free, confidential helpline is here for you 24/7, and our operators will help you find solutions to get your life back on track. Reach out to us today and give yourself a brighter tomorrow!