Falling Cryptocurrency Market Means Uncertainty For Casinos And Sports Betting

Posted: June 20, 2022, 2:12 a.m.

Last update: June 20, 2022, 2:12 a.m.

The last few weeks have been significant for cryptocurrencies. Bitcoin continues to drop to new lows causing the market for smaller cryptocurrencies to crash. The market decline has left consumers and analysts wondering about the future of all new currencies. This is especially true of its uses in online casinos and sports betting.

Bitcoin
A person walks past the bitcoin logo during the Bitcoin 2022 conference at the Miami Beach Convention Center. (Photo: Marco Bello/Getty Images)

Last week, bitcoin fell 7.8%. On Saturday, it fell to $17,592.78. This is its lowest price since December 2020.

In the overall market, the cryptocurrency has lost almost 60% of its value this year. This month alone, it has lost 37% of its value. And although it managed to recover 7% earlier this week, financial analysts around the world have coined the phrase “crypto meltdown” to categorize the destructive loss.

The fall of Bitcoin has also led smaller cryptocurrencies to take action. US crypto lender Celsius recently froze withdrawals and transfers between user accounts and suspended customer withdrawals.

Talk of the US Federal Reserve raising interest rates for the United States as inflation in the world’s largest economy soars has also increased pressure on risky assets, from cryptocurrencies to shares.

But what exactly do these changes mean for the market and the future of crypto and casinos?

Casinos are embracing crypto

Almost as soon as cryptocurrencies proliferated, the igaming industry saw the opportunity to get involved. Crypto casinos have sprung up all over the world, with big names including Bitcasino, FortuneJack, and 1xbit.

In early 2014, Zynga began testing bitcoin for in-game purchases for several of its games. At the same time, the D Las Vegas Casino Hotel and the Golden Gate Hotel & Casino announced that they would also accept bitcoin.

Platform provider Softswiss recalls establishing between three and four bitcoin casinos per month in the early years, between 2013 and 2014. While many have not survived the various downturns since then, many have. These “crypto winters,” like any economic downturn, tend to sort the wheat from the chaff, leaving the more resilient companies to establish a stronger footing in the market when it picks up.

The future of crypto casinos

Prior to this year’s epic crypto crash, we saw a massive crossover between crypto and sports betting in the United States. The Super Bowl was dubbed the “Crypto Bowl” after major crypto brands including Coinbase, Crypto.com, and FTX rushed to market their wares in prime-time ad slots. The slot machines were worth between $7 and $14 million.

More recently, even after the dramatic fall in crypto market capitalization, DraftKings CEO Jason Robins has shown interest in integrating crypto into the operator offering. However, he did not offer any specific timeline for its implementation.

Of course, people want it.” he told Decrypt’s gm podcast last month. “Certainly in the market we should be able to do that. So we are working on it. »

The daily fantasy sports and sports betting giant had already entered the non-fungible token (NFT) space in July 2021, launching a marketplace which is the exclusive platform to buy, sell and trade NFTs from the collection of autographs from NFL legend Tom Brady.

Fall of cryptocurrency in 2022

Since May, the crypto world has been rocked by its biggest crisis yet.

Bitcoin fell to $20,950.82 on June 14, following the unexpected demise of Terra USD – a so-called stablecoin, a fiat-backed crypto that hardly changes in price – and its crypto sister, LUNA, in May.

Terra has been part of several attempts in recent years to quell the notorious volatility of cryptocurrencies by pegging their values ​​to fiat currencies, hence their nickname “stable” coins. The idea is that they would track the value of fiat and be insulated from the volatility that otherwise characterizes crypto.

The uncertainty that followed these failures sent the industry into a “crypto winter,” seen as a temporary downturn by many crypto enthusiasts. They believe it can be overcome if they hold on and wait for the inevitable gradual thaw and recovery.

While a crypto winter is not good news for crypto start-ups or businesses with insufficient cash to weather it, most established crypto casinos will likely ride through it, to benefit even more when the market starts up again. to increase. But the slowdown will undoubtedly slow the rate at which others adopt crypto into their operations.

However, it remains to be seen to what extent the downturn in the crypto market will affect the future adoption of casinos and sportsbooks.

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