Many cryptocurrency and online gambling experts have described the integration of both industries as a match made in heaven. Crypto gambling has many benefits, including fast transactions, cheap transaction costs, anonymity, and more. However, one cryptocurrency aspect can be both an advantage and disadvantage: volatility.
To this end, learning how volatility works and how it affects eSports betting is crucial for every bettor. Here is a comprehensive guide on the relationship between cryptocurrency volatility and crypto betting.
What Does Cryptocurrency Volatility Mean?
Volatility refers to the fluctuation of cryptocurrency prices. It is one of the main aspects of cryptocurrencies, as prices have drastically risen and fallen many times.
Overall, volatility has been mostly good for the cryptocurrency market. For example, Bitcoin’s value has grown from pennies in 2009 to more than $65,000 in November 2021. However, to put crypto volatility into a balanced perspective, Bitcoin currently is worth less than $30,000, albeit its price is mostly stable.
Fortunately, cryptocurrencies are becoming less volatile as the cryptocurrency market matures and stabilizes. For example, Bitcoin’s price history reveals that it is less volatile today than it was ten years ago.
How Cryptocurrency Volatility Affects Betting
Crypto betting has many advantages, including cryptocurrency. Essentially, players can get lucky and win twice: once if their bets win and again if the cryptocurrency’s value increases. For example, a $100 stake in your favorite eSport using Bitcoin could be quickly worth $110 if Bitcoin’s value increased by 10%, which is quite common. This means a bigger stake and potentially bigger winnings. Upward volatility also increases the value of the cryptocurrency sitting in your player’s account.
However, volatility is a double-edged sword, and it can quickly become a disadvantage. Cryptocurrency prices have experienced significant declines a few times over the past, resulting in losses. This means that a $100 wager using Bitcoin could be easily worth $90 if Bitcoin’s value fell by 10%.
Tips to Limit Volatility When Betting
Smart bettors shouldn’t ignore the potential downsides of cryptocurrency volatility. However, they shouldn’t be afraid to take advantage of its potential benefits, as cryptocurrency investors do. Besides, the other benefits of crypto gambling far outweigh any potential risks associated with volatility.
Volatility is beyond any sports bettor’s control. However, you can limit the potentially negative effects of volatility when betting on your favorite eSports. Here are X tips to help you cushion the value of your crypto bets:
1. Choose Your Cryptocurrencies Well
Different cryptocurrencies have varying volatility rates. For example, Bitcoin is more volatile than Ethereum, while Tether is more volatile than Bitcoin.
Additionally, cryptocurrencies have unique and different qualities that offer varying crypto betting benefits. For example, some cryptocurrencies charge lower transaction fees and process transactions faster than others.
Crypto sportsbooks accept dozens of cryptocurrencies. However, the best cryptocurrencies to gamble with are the following:
- Bitcoin
- Ethereum
- Bitcoin Cash
- Litecoin
- Ripple
- Dash
- Dogecoin
- Stablecoins
Bitcoin is the first cryptocurrency. It also stands out in many other ways, including being the most valuable. Bitcoin is also quick and cheap to transact, and virtually all crypto bookies accept it. While Bitcoin can be highly volatile, its value is stabilizing via market regulation and mass adoption, helping reduce uncertainties when betting. Litecoin and Ethereum are also relatively stable and easy to use.
Stablecoins include Tether (USDT), USD Coin (USDC), and Binance USD (BUSD). They are reliably stable because their values are directly linked to the values of standard assets and currencies. For example, Tether is linked to the U.S. dollar.
2. Choose Your Crypto Sportsbooks & Bets Well
Hundreds of online crypto sportsbooks exist today. However, some are better than others in many aspects, including crypto volatility. Ideally, your chosen crypto sportsbook should display cryptocurrency values in real-time to help you monitor their volatility. Other related factors to consider include the bookie’s cryptocurrency transaction charges.
Besides volatility, a bet’s odds also affect your potential winnings. As such, you should find comprehensive guides covering eSports betting sites and odds. eSports betting can be fast-paced and a bit complicated if you don’t know the basics, so study as many guides as you need.
3. Withdraw & Convert Large Winnings Immediately
While cryptocurrencies are usually relatively stable, their prices can change drastically within a few hours or days. For example, Dogecoin, a popular meme coin, lost more than 45% of its value within 24 hours in May 2021. To this end, quickly withdrawing and converting your crypto winnings is prudent, especially when working betting with highly volatile cryptocurrencies.
This rule mostly applies to big crypto winnings. It is also worth noting that crypto bookies have different withdrawal limits and requirements. Some crypto sportsbooks also offer direct cryptocurrency/fiat currency exchange services. This is why considering the finer details is always important when choosing a crypto sportsbook.
4. Keep Your Deposits Moderate
How much money do your wager per week or day? How often do you fund your player’s account? Making large crypto deposits may seem convenient, but it is a potential risk considering the unpredictable nature of cryptocurrency volatility. Making moderate cryptocurrency deposits (only as much as you intend to wager) would be more prudent.
Some cryptocurrency sportsbooks charge high transaction fees for deposits and withdrawals, while others are free. Transaction fees can add up over time, especially if you make frequent transactions, so check the fine print for transaction fees.
Final Thoughts: Make Crypto Volatility Work in Your Favor
Cryptocurrency volatility has its benefits when it comes to crypto betting. You can take advantage of volatility by monitoring cryptocurrency prices, albeit this requires time and dedication. You can also always limit the potential disadvantages of volatility by practicing the tips discussed in this article.
Fortunately, cryptocurrency volatility mostly works in crypto bettors’ favor because prices have been rising steadily. Finally, the other benefits of crypto betting outweigh the disadvantages of cryptocurrency volatility. As such, don’t be afraid to bet on your favorite eSports using your favorite cryptocurrencies for a smoother and more rewarding betting experience.
