Is Crypto Trading Gambling?

Millions of players around the world have recently started investing in cryptocurrencies, and there are millions of active accounts for popular cryptocurrencies like Bitcoin. Besides being popular, these digital financial markets are also very controversial. Some investors believe that crypto is the future of modern money. On the other hand, some eminent investors like Warren Buffet have staunchly opposed Bitcoin. They say its lack of central bank regulation and higher volatility make Bitcoin vulnerable.

Whether they invest in crypto or not, most experts believe that even though cryptocurrencies have taken the market by storm recently, the world of crypto trading is only the beginning. Therefore, to learn whether crypto trading is gambling, we will have to read through this blog till the end in detail.

Key Takeaways

• Brief introduction on crypto trading and gambling
• Understanding the similarities and differences between crypto trading and gambling.
• When can crypto trading become a mode of gambling?

What is Crypto Trading?

Cryptocurrency is a digital asset that uses cryptography to secure transactions and control new units. It is decentralized, so any individual entity cannot control it. Bitcoin was the first cryptocurrency, created in 2009. 

However, there are differences between gambling with real money and crypto gambling. For cryptocurrencies, you are gambling with digital assets rather than gambling with physical currency. Similar to gambling games, cryptocurrency gambling involves an element of chance. But there are risks, too, as you invest your hard-earned money in cryptocurrency. 

Comparing Crypto Trading and Gambling

Are crypto trading and gambling the same thing? While both have a possibility of financial gain and risks, they also differ in strategy, skill, and purpose. In this comparison, we will explore the similarities and differences. 

Similarities

Unless you become a part of any cryptocurrency casino, you won’t believe that investing in cryptocurrency is a form of gambling. However, there are some similarities that the traders must be aware of, especially if you are susceptible to the issue of gambling.

1. Getting Rich Quick Schemes

In crypto trading and gambling, you can be easily preyed upon for your hopefulness. Every casino dealer might ask you to play just one more round, and you will win! Similarly, your favorite celebrity or influencer might recommend the new altcoin and say this is the ticket to becoming rich. Without knowing, you can sit directly at the blackjack table and invest a few hundred dollars into cryptocurrencies. You can easily get robbed by a pump-and-dump scam or by a dealer who is sure the house will always win. 

2. The Lows and the Highs

When the gambler wins any money or the crypto prices go high, the “high” feels the worth of all the risky spending. This can trap an individual in their dopamine behavior. And the investors start chasing the “dopamine” released by their brains during the high. Since our brains require priority, the stake of crypto keeps rising until a full-blown problem behavior develops.

3. Volatility and Uncertainty

The long-term future of cryptocurrency is completely unknown, and its prices are almost impossible to predict. Therefore, investing in any digital asset, be it cryptocurrencies or altcoins, means dealing with the constant pressure of rising and falling crypto prices. Similar to the pathological gamblers convinced to go for one more spin to win a jackpot, those investors indulged in crypto investment can convince themselves to invest more money and not pull out their funds even if the wealth crashes or burns. However, gamblers and investors trust a volatile and uncertain system. Both have a deck stacked against them, but in a different way. 

Differences

There are a few marked differences between crypto gambling and investment. Here are the main ones that can categorize both of them.

1. Crypto is not entirely Up to Chance

When purchased wisely, cryptocurrency has the potential to become an effective investment strategy. You can keep them as a part of your diversified portfolio. On the other hand, gambling is always up to chance. Since the chances of winning a significant amount of money are very small, gambling, by its nature, is very unlikely to yield long-term profits. Even if given a choice between the two, expert financial advisors would also prefer investing in crypto rather than in gambling.

2. Different Rules and Regulations 

One of the problems of crypto trading is that it is naturally unregulated. Buying crypto is like purchasing imaginary money. Many trading platforms do not have regulations. And whenever there is a scam, you won’t get any of your money back. You cannot also open any legal case against it.

Even though gambling can be dangerous for some individuals, it is different from crypto investments because it is more regulated. There are federal regulations that control online gambling and sports betting, as well as games of chance and games of skill. But, if you are spending your earned cash at the casino, even the police can’t help you in the scene of a scam.

When Does Crypto Trading Become Gambling?

Crypto Trading becomes gambling when decisions are driven by speculation or emotions rather than analysis. You can move forward impulsively if you do not research properly. Dependency on false schemes like the pump and dump scheme can further mirror gambling behaviors. 

Additionally, excessive risk-taking, such as avoiding stop loss orders and neglecting risk management, can make trading gambling rather than a calculated strategy. Responsible crypto investment requires research and analysis, understanding market trends, and minimizing emotional decisions to avoid falling into this trap.

Conclusion

Cryptocurrency can never be coincided with gambling. People who gamble are betting on what they think will happen and winning money accordingly. On the other hand, cryptocurrency is a store of value like gold or silver, the price of which goes up and down. The only thing about crypto is that it is decentralized and unregulated. Do not make crypto related to gambling. So whenever you are investing in crypto, do proper research without fail.

Selecting the right exchange to trade on crypto is also essential. You can choose Mudrex as your crypto investment platform. Traders and investors can trade on their favorite cryptocurrency on Mudrex and gain useful insights on the recent and trending crypto news. So, download the Mudrex app from the Play Store now and get started.

FAQ

Is crypto trading basically gambling?

Depending on how you approach it, crypto can be a form of investment or gambling. If you have a dedicated approach to a long-term strategy, you cannot refer to crypto as gambling. It becomes an investment. However, if you are spending your money on crypto thinking that you will hit a jackpot, it becomes a form of gambling.

Is crypto trading legal?

The legality of crypto trading depends on the country’s government and varies. In India, investors can trade and hold crypto assets but cannot use them as a currency. This is almost the same worldwide, but trading rules might differ in different countries.

Can you gamble with crypto?

Crypto gambling refers to those online gambling platforms where you are using cryptocurrency to play the games. Thus, you can gamble with crypto and expect to win rewards.