People have been betting on sports in some form or another for hundreds of years. Sporting contests have a quality that fascinates gamblers.
People have been investing in cryptocurrency for far less time. Cryptocurrency, which combines virtual currencies and blockchain (a public digital ledger), only became available in 2009 with the invention of Bitcoin.
Since then, lots of new projects have sprung up in the crypto world. People can invest in everything from blockchain-based casinos (a.k.a. “provably fair”) to supply-tracking services. Given that sports betting has been around much longer than cryptocurrency, it doesn’t seem like the two have much in common. But you’d be surprised at how many similarities sports gambling and cryptocurrencies share.
I’m going to look at 7 of these similarities below, some of which will help you make better crypto investments and sports wagers.
The reason why Bitcoin was invented in 2009 was in response to the 2008 American financial crisis. The inventor, going by the alias Satoshi Nakamoto, created Bitcoin to serve as a decentralized currency that’s free of governments and big banks.
Nakamoto’s identity is still a secret, and many debate on whether the person behind the alias is still alive. But whoever Satoshi Nakamoto is, their legacy has grown exponentially in less than a decade.
Bitcoin hasn’t yet achieved Nakamoto’s vision of being the world’s primary currency. But it has succeeded in gaining widespread fame and becoming a very popular investment.
Sports betting, on the other hand, isn’t commonly looked at as an investment. But many successful bettors view their wagers as such.
The reason why is because skilled bettors study each wager before placing it. They then invest their money into a bet in hopes of achieving a profit.
The difference between sports gambling and cryptocurrencies as an investment is easy to see. You’re taking 100% risk with a sports bet, while you’ll most likely recoup some of your investment on a losing cryptocurrency.
Nevertheless, both should be viewed as investments. Sports betting may be volatile, but informed wagers also have the potential to earn you profits.
Neither cryptocurrency nor sports betting is a pure gamble. Instead, the most-skilled investors and bettors stand to make profits.
Of course, these skills don’t just come naturally. You have to hone your craft by studying available resources and using different tools.
Sports bettors can read articles, watch YouTube videos, listen to handicapping advice, and use data-crunching software to improve. These resources help you handicap games and see how your point spread or moneyline estimation compares to a sportsbook’s line.
I recommend that beginning sports bettors read plenty of articles to learn the basics. You can then move on to advanced software to find helpful numbers and trends.
Some sports bettors even create advanced systems using different parameters. For example, an NBA bettor could use the following system:
This system is simple with regard to the winning strategies used by professional bettors. And it may not ultimately win money.
But you can measure this strategy’s potential success with back testing, which involves comparing systems to historical data. For example, you can test this strategy on any NBA game within the last three seasons that match the parameters.
Cryptocurrency strategy is different in many respects. But you still need some the same traits to be successful.
Serious crypto currency investors often look at a project’s team, whitepaper, vision, and partnerships. They may also look around at popular forums like Reddit to see the general sentiment regarding a specific cryptocurrency.
The goal of long-term investing is to find projects that will become useful to consumers and businesses and increase in value.
Day traders also use strategy in cryptocurrency, although their approach differs. These investors are looking to buy undervalued coins/projects and later sell them for short-term profits.
Day traders often use technical analysis to figure out where the market and/or specific projects are going. Technical analysis involves looking at charts for patterns that indicate where coins are headed.
Crypto investors can also use software just like sports bettors. These programs can be useful for technical analysis or simply to execute buy and sell orders.
Overall, both sports bettors and crypto investors can benefit from putting work into their picks.
Sports wagering and cryptocurrency investing are uncertain activities with incomplete information. This means it’s easy to make mistakes when doing either.
One of the most-common blunders that sports bettors make is being biased to their favorite team. For example, a New York Mets fan might give the Mets their attention first before considering the other side of a line.
Professional bettors, on the other hand, don’t have such biases and are only concerned with taking the best option. They weigh the advantages and disadvantages on each outcome before making their selection.
Even worse than having a bias is failing to do any research at all. Novices often make wagers based on hunches or feelings.
Anybody can make a few winning wagers in a short time span. But those who win over time are either great at handicapping individual games and/or developing a winning system.
Those who do poorly when investing in cryptocurrencies are often undisciplined.
They commonly buy into projects that are rapidly increasing in price since they have a fear of missing out (a.k.a. FOMO). Likewise, these same investors quickly sell coins when they take a sharp dip.
Either scenario is bad because you’re letting emotions guide your buying decisions. Furthermore, rapid price movement one way or the other often experiences a correction.
Here’s an example:
Much like sports bettors, cryptocurrency investors can also be lazy and not do any/enough research. Some people will buy crypto just because they think that it’s a get-rich-quick scheme.
These same investors are often disappointed when their coins are stagnant or even lose money. This snowballs into the aforementioned problem of selling at a loss whenever one sees the price rapidly declining.
Another cryptocurrency mistake is listening to advice from people on forums. Just because somebody sounds knowledgeable on Reddit doesn’t mean that they’re giving good advice.
A common piece of advice to these people is to ‘do your own research’ (DYOR). This refers to looking into a project’s team and whitepaper yourself, rather than taking a stranger’s word.
The biggest reasons why people make sports bets or buy cryptocurrencies is to make money. And it’s exciting to think that both give you the chance to earn long-term profits.
Some bettors are so skilled that they’re able to make a living by wagering on sports. A small percentage also become rich and make millions of dollars with sports betting.
One example is Haralabos Voulgaris, who’s earned millions by betting on the NBA. Voulgaris’ basketball knowledge has landed him on sports talk shows and even earned him a short consulting stint with an NBA team.
Even if you don’t become as successful as Voulgaris, you can still earn enough profits to supplement your income. Some bettors are able to win thousands of dollars per year, which is a tidy sum from an entertaining hobby.
Cryptocurrency investors are even more likely to earn money over the longterm. The overall crypto market cap has been increasing ever since Bitcoin became available.
The market cap grew by over 1,600% in 2017 alone. And while this doesn’t mean that you can throw money into any coin and expect profits, the growing market increases the odds of picking winners.
This is a big reason why crypto investors suggest a buy-and-hold strategy, which is referred to as “HODL” on forums.
One can argue that it’s easier to make long-term profits with cryptocurrencies now than it is with sports betting. But much of this also depends upon what you enjoy the most and are willing to put work into.
Bankroll management is an important key in both cryptocurrency investing and sports betting. Properly managing your funds allows you to weather the bad times and avoid risking money that you can’t afford to lose.
Successful sports bettors usually only risk 1% to 3% of their bankroll on a given game. Here’s an example:
One of the toughest things about sports betting is surviving losing streaks. Therefore, you must ration your bets out so that you never lose too much at one time.
Doing so helps you get through losing streaks until you eventually start winning again. It also gives you time to continue learning sports betting strategy and improving your win rate.
On a more basic level, sports bettors must figure out how much money they can comfortably afford to bet. The last thing you want to do is risk cash that’s meant to pay bills and buy food.
Cryptocurrency bankroll management is the same way in that you must calculate how much you can invest without affecting your day-to-day finances.
After all, some investors get too excited and pour more money into crypto than they can afford. This happened after the bull run in December 2017, which saw Bitcoin go from $10,000 to almost $20,000 in two weeks.
People began FOMOing into Bitcoin in hopes that the run would continue. And the worst part is that some were over-investingto make a quick return.
The result was a disaster for misguided investors because the market sharply corrected in January 2018. A visit to Reddit around this time showed a large number of posters regretting their irresponsible investing strategy
A good way to avoid putting too much into cryptocurrency at one time is to use dollar cost averaging (DCA). This concept refers to investing on a schedule, rather than whenever you feel like it.
The overall idea behind DCA is that you avoid investing based on emotions and instead use a mechanical process. While you may miss out on some profitable opportunities, DCA ensures that you remain disciplined and avoid FOMO.
Crypto investors use other forms of bankroll management. But DCA is a good place to begin if you need a reference point.
Sportsbooks make their money by taking a fee from the losing side. On point spread bets, this usually amounts to 10% “juice” from the losers.
Here’s an example on how such a wager looks:
The -110 indicates that you’re risking $110 to win $100.
Sportsbooks set lines to draw equal action on both sides of a wager. This guarantees them a profit when they collect juice from losing bettors.
Sports betting doesn’t necessarily require a fee to play. But the juice is basically a fee because roughly 50% of bettors have to pay this extra cost when losing.
Cryptocurrency does require traditional fees to trade. Crypto exchanges take a small percentage of every trade on their platform.
Here’s an example on how this works:
You can see that the fee is almost nonexistent in comparison to how much you’re trading. But fees become a bigger deal when you’re making large purchases or day trading.
If you were to purchase $10,000 worth of cryptocurrencies in a week, you’d end up paying $50 in fees.
Discussing trading fees and juice isn’t meant to scare you away from crypto or sports betting. But it’s wise to keep these extra costs in mind as far as bankroll management goes.
Cryptocurrency and sports wagering are more than just ways to make money—they can also provide entertainment for those involved.
The entertainment aspect of sports betting is immediately clear. You place bets on games, and you can watch them afterward to see how your wager pans out.
The fan aspect of sports gambling is a driving force for the industry. A Nielson Ratings study shows that NFL sports bettors watch an average of 19 more games per season than those who don’t bet.
Another fun thing about sports wagering is that you can make a bet, then head out to a bar to watch the game with friends. The experience is even more entertaining if your friends also place wagers on the contest.
Either way, it’s a thrilling proposition to see if your bet will win in real time. I’ve had many wagers be decided in the waning seconds of a game.
Cryptocurrency can’t compete with sports betting in terms of sheer entertainment. After all, you can’t buy a coin and then watch a game to see if it’s a winner within three hours.
But you can be entertained by cryptocurrencies in other ways. Some investors get so wrapped up in their coins that they check price charts every hour.
CoinMarketCap.com and LiveCoinWatch.com give you the opportunity to track your coins in real time. You can also simply look at exchanges like Binance, Gemini, or Kucoin to see how your holdings are doing.
Another fun thing about cryptocurrency is seeing what people post on Reddit and other forums. You can view all kinds of discussions on crypto, including use cases, price predictions, jokes/memes, gossip, and the best small-market-cap coins.
Sports betting and cryptocurrency aren’t completely interchangeable. But they share enough commonalities to where skills and ideas in one can transition to the other.
Both crypto and sports gambling involve a fair amount of risk. And you can capitalize on both with enough study and discipline.
Discipline is a key word here because you must be good at appropriating risk. Investing too much into cryptocurrencies or sports wagering can leave you unable to pay next month’s rent.
Many see the risk as worth the reward when considering the goal of making long-term profits. Some people are lucky/skilled enough to make a living through cryptocurrency or sports betting.
You don’t necessarily have to get to this point to enjoy either activity. But it’s always nice to at least make some money, whether you’re wagering on sports or buying into a blockchain project.
Keep the 7 similarities that I’ve discussed here in mind when deciding if you want to take up sports betting and cryptocurrency investing.
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