The steady rise and inclusion of Blockchain technology into various industries in the world cannot be ignored, and this development has already found its way into online betting. This is not surprising as betting with cryptocurrencies offer users two very important pillars of online sports betting- security and anonymity. Several online sportsbooks now permit cryptocurrency transactions, some of these include Stake.com, Cloudbet, amongst many others we have provided for you. You can find more online sportsbooks that accept cryptocurrencies on CryptoBetting.
Bitcoin was the pioneer cryptocurrency that paved the way for other forms of crypto now used. It is still highly valued today and even experiences surges regularly, the same way with others. These other coins include Bitcoin Cash, Ethereum, Litecoin, Monero, Dash, Ripple, Dogecoin. However, the risk and issue associated with betting with these coins is that the same way they surge upwards, is the same way they come crashing down sometimes, hence, it is possible that when you had placed a bet, the value was high but upon having won, the value of such coin could possibly have reduced. This is what is referred to as Volatility.
Therefore, as an online sports bettor, the big question on your mind must be why does volatility occur and how can it be handled.
Volatility of cryptocurrencies
Before registering on any Bitcoin sports betting site, make sure you know how to bet with cryptocurrencies and all likely issues you will encounter. If you encounter any problems while betting, always make sure to contact customer support in order for a quick fix and to ensure you enjoy your overall betting experience. Upon registering with a Bitcoin betting site, always keep in mind that the issue of volatility can arise, the sportsbooks are not responsible for such issues, rather it is a problem associated with crypto in general.
It is common knowledge that fiat currency is way more stable than cryptocurrency. This is because the value of cryptocurrency fluctuates heavily, and the effect of such fluctuation is that your entire profit which you must have earned, gets affected while using cryptocurrency to bet online. Even where you had scored a big win when betting online, the value of the cryptocurrency could be quite low that the entire amount is totally less than you may have anticipated. Though, volatility could help you also where there’s a surge in the value as this will lead to you amassing more profits than you had expected.
Even though assets generally have their levels of volatility, crypto coins will easily take the top spot if there is a volatility contest between assets.
For example, imagine you bet 10mBTC when the value of 1mBTC is $50, if you end up winning 30mBTC, but the value of 1mBTC already dropped to $30, rather than have mBTC worth $150, the value of your win places you at $90, hence the volatility will have cost you $60.
Why are cryptocurrencies so Volatile?
It is important to understand what makes cryptocurrencies so volatile, as understanding the causes of their instability is the first guide in helping you manage it. The reasons are contained below:
- Relatively New compared to Fiat Currency
Compared to fiat currencies which have been around and have been widely accepted, cryptocurrencies are still relatively new. Due to this, they have not been able to develop the solidity of assets such as bonds, stocks. With time, the unpredictability should end, but at the moment, when you bet with cryptocurrencies, you must brace yourself for whatever shifts occur from the point of making your deposit to the point of your withdrawal.
- Negative News that causes Panic
Given the fact that not everyone knows how cryptocurrencies work, any negative news about them tends to generate a lot of panic. So, when there is news about how a certain coin struggles or certain institutions pressurize the market, many persons tend to panic and sell their coins.
- Following the Crowd without the required knowledge
A lot of individuals who engage in cryptocurrency investment do this because they do not want to miss out on current happenings. This is good, however, when you do not follow up by acquiring the needed knowledge, this could result in simply following the crowd. Hence, where there’s a mass sale or purchase of coins ongoing, they simply follow suit.
All these factors are what cause unpredictability, whether a drop in value or an upsurge.
How to handle the volatility
Although you cannot determine when the value of cryptocurrencies will go up or down while betting with them, one way you can manage the volatility is by:
- Knowing when to bet with crypto by taking note of trends.
- Gambling more with crypto
- Saving the rest
- Use stablecoins
Know when to bet with crypto by taking note of trends
Always watch out for occurrences in the past during which crypto prices have previously crashed down or surged forward. For instance, whenever news about a financial institution or government preparing to ban the use of cryptocurrency arises, prices could dip and there is a lot of panic-selling. So, as a sports bettor, when such news is being rumoured, it is best not to bet using crypto.
Gamble with more crypto
When you place more bets using Bitcoin or another coin, you are ensuring the currency circulates more across the society. It is due to this that more online betting sites have accepted cryptocurrencies as among their payment methods. This will consequently help in maintaining the value of the coins and lower their volatility. With time, your fears over the instability will reduce and with more wins when you bet, you can get more Bitcoin added to your existing collection.
Save the rest
Never gamble with all your coins, you must always save. This is because when you save up, upsurges are still bound to happen meaning you can recover what you may have lost in the past. If you bet with all, even if you win, the value of such crypto-coins may be low at that point meaning you have lost some money. Hence make sure you gamble with only the amount you can part with.
Use Stable Coins
In the crypto world, there are tokens called stable coins. These coins are pegged with the US dollar, hence there are affected with little to no fluctuations. Examples are USDT and USDC which can be bought on any reputable exchange. If your sportsbook or casino offers the use of stablecoins, it might be a better alternative to bitcoin and other crypto-assets.
Now that you’re aware of what causes the volatility of cryptocurrency. You should spend less time worrying about this and simply work with the proven strategies above while betting.