Over the years, Bitcoin has slowly but steadily made its mark known globally. Now, what was once a niche currency used by deep web users has become a mainstream investment with a total market capitalization of more than $700 billion at the time of writing.
Of course, Bitcoin’s meteoric rise to fame hasn’t been painless. From threats of government regulation to outright market manipulation, the crypto market is known for its extreme volatility.
So, this is one of the reasons why Bitcoin is so heavily favored by some portions of the market, as prices can suddenly shift without warning. As a result, fortunes have been made and lost overnight from Bitcoin speculation.
It has also given rise to whether investing in Bitcoin is similar to gambling. And this is precisely what we’re going to be looking at in this article.
The Difference Between Investing and Gambling
Despite what some may say, investing in Bitcoin is not the same as betting on it. While both methods allow you to earn Bitcoin, they each require different skill sets and have their respective pros and cons.
Neither method is better than the other, and it all comes down to how you manage your risk. Investors rely on models and past data to make decisions where a punter may attempt to play the odds to maximize their chances of winning.
Additionally, some games of chance, such as poker, rely more on skills than outright luck. Hence, this is why poker tournaments are an exciting, high-stakes affair. Gambling is a popular hobby and that is what it should be only: a fun exciting time to enjoy. Investing requires more strategy and should be thought on the long term.
Now that we’ve identified the differences between investing and gambling let’s take a look at:
Cryptocurrencies are a high-risk investment, and the advice provided here does not guarantee success. It is only intended as a guideline to help you better manage your risk exposure.
How to Invest in Bitcoin Successfully
Although there is a significant degree of volatility involved with Bitcoin and other cryptos, investors have various methods of mitigating their risks. These include tracking past trends and monitoring market conditions to make an informed decision.
1. Do Your Research
Never underestimate the importance of quality research when it comes to investing. This is sage advice that experienced investors swear by.
Why? Since investing is all about recognizing market signs and acting on them, it allows an investor to get ahead of the market and leverage on their position for maximum profitability.
The same also applies in the event of a market downturn. For example, before the Chinese government’s crackdown on cryptocurrencies, the authorities had already begun taking action against financial institutions in the country.
Given how cryptocurrencies are viewed in China, it was only a matter of time before regulators would begin targeting them. Learning to recognize such signs is essential and only comes from thorough research and keeping up to date with the news.
2. Don’t Get Too Greedy
When investing, it’s always best to leave while the going is still good. And that’s why you should never get too greedy and cash in on your investments while the market is at its peak.
On the other hand, a greedy investor would attempt to hold out to maximize their profits only to get burned when the market corrects itself.
So, the lesson here is to set a limit for yourself and keep to it. Once your investments have achieved your desired rate of return, it’s time to call it a day and cash in. While you may lose out in terms of opportunity cost, you increase the chances of walking away with something at the end of the day.
How to Gamble with Bitcoins
On the other hand, if you’re looking to make money while you gamble with Bitcoin, you should consider:
1. Hodl-ing Your Bitcoins
Also known as holding, hodl-ing refers to the strategy of retaining your Bitcoins for the long term. Given the highly volatile nature of cryptos, hodl-ing is a low-risk method of letting your Bitcoins work for you.
However, keep in mind that this strategy can sometimes backfire in the event of a downturn. So, just as you would with investing, you need to regularly keep track of market conditions to stay ahead of the curve.
2. Play the suitable games
If you’re looking to win big at games of chance, it all comes down to choosing the suitable game to maximize your chances of winning.
For example, blackjack is a high-paced game that suits punters looking to get in and get out quickly. On the other hand, poker calls for more skill but promises a larger payoff in the long run.
So at the end of the day, it all comes down to which games suit your strategy and skill level. Fortunately, online casinos often accept Bitcoin deposits and provide you with a large selection of games to choose from.
To sum up, investing in Bitcoin is different from gambling, but there is some overlap between both disciplines. Additionally, both methods are also a great way to earn Bitcoins.