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Cryptocurrencies have exploded in popularity in recent years and Bitcoin is currently trading at one of its highest values of almost $37,000. With the rise of digital assets like Bitcoin and Ethereum has come the emergence of crypto gambling – using cryptocurrency to place bets and wager on games at online casinos and gambling sites. But what drives people to gamble with these digital currencies? Research is starting to uncover insights into the psychology behind crypto gambling…
Firstly, Why Has Gambling Become So Popular?
Gambling has become an increasingly popular pastime for many people for a variety of reasons. A major draw is the exhilaration and thrill that comes with games of chance. The unpredictability of activities like slots or roulette provides an adrenaline rush and excitement that many find highly appealing. There is also the allure of potentially winning some money from even a small wager. Gambling offers a break from daily routines and a bit of spice for those seeking adventure.
Additionally, the accessibility of gambling has contributed greatly to its rising appeal. With online casinos and mobile apps, people can now gamble from home or on the go with great ease. This wealth of convenient gambling options has brought the activity to a much wider audience.
Gambling has taken on a social component that adds to the enjoyment. Social gambling platforms have turned it into a shared activity, allowing friends and acquaintances to compete and bond over the experience. This social dimension has helped drive gambling’s popularity as a hobby, providing entertainment and connections with others.
Factors Specific to Crypto Casinos
Although the above factors apply to both fiat and crypto gambling, one major appeal of crypto casinos specifically is enhanced privacy and the ability to play anonymously. Leading crypto casinos allow users to bet discreetly without divulging extensive personal details. No matter where you spend them, cryptocurrencies like Bitcoin provide a high level of anonymity, making it nearly impossible to track players. This not only protects user identities but also safeguards against potential data breaches.
Crypto casinos also leverage blockchain technology to guarantee unmatched security and fairness. The transparent, immutable ledger ensures games are provably fair, preventing manipulation of outcomes. This fosters trust between players and platforms.
Speed is another advantage. Cryptocurrency transactions process within minutes, enabling instant withdrawals. Traditional casino players often have long wait times for payouts. The rapid cashouts of crypto casinos appeal to players as they can withdraw any winnings and spend them almost immediately.
Crypto casinos also provide easy access for worldwide players. Cryptocurrencies transcend borders and regulations, allowing participation regardless of location or local laws. This is game-changing for restricted jurisdictions where online gambling is not yet available locally. Instead, as crypto isn’t classed as legal tender, gambling with it tends to be less restrictive than gambling with fiat.
Similarities Between Crypto Trading and Gambling
Several studies have looked at the similarities between trading cryptocurrency and gambling. Both involve speculation on uncertain outcomes, driven by the same motives like seeking profits and thrills. One survey of over 2000 residents found the most common reasons for buying cryptocurrency were as a gamble, for portfolio diversification, or for quick gains.
This highlights how the crypto markets have an inherent gambling-like structure. Cryptocurrencies are traded based on limited information, while prices fluctuate dramatically, resulting in highly uncertain risks and rewards. Just like traditional gambling, wins and losses are predominantly chance-driven, unless you are a well-seasoned player with an edge.
Demographics of Crypto Gamblers
But who exactly are these crypto traders who also dabble in gambling? Here are the statistics on the most common crypto gambling customers:
- Young – mostly between ages 18-30
- Male
- Well-educated with a bachelor’s degree or higher
- Employed and financially well-off
This paints a picture of a largely young male demographic with high education and income levels. They also possess an advanced understanding of cryptocurrencies and blockchain technology.
The crypto-gamblers displayed far greater domain-specific knowledge compared to non-gambling crypto users. They likewise showed heightened ideological motivation and trust in cryptocurrency. This suggests crypto-gamblers view digital currencies as more than just speculation – they strongly buy into the ideological promise of decentralization and disruption of the financial system.
Clues in Patterns of Involvement
But it’s not just demographics and motivations that are telling. The actual patterns of how heavily crypto users engage in gambling also provide important insights.
A study analyzing a sample of German crypto gamblers identified three distinct clusters based on their intensity of involvement across mental, proactive, and financial dimensions:
- Low Involvement – Casually involved, more reactive than proactive
- Medium Involvement – Moderately involved with relatively high trust
- High Involvement – Heavily involved across all dimensions
A considerable portion fell into the high involvement category, suggesting this group in particular may be at risk for over-engagement and any associated harms. The level of involvement across cognitive, behavioral, and financial factors appears to offer the clearest indication of who is most “all in” with crypto gambling. It’s not just trading activity but the holistic psychology behind it that should be examined.
Other Psychological Drivers of Crypto Gambling to Consider
While some psychological factors also apply to traditional gambling activities, others are more specific to crypto gambling. Here’s a look at both:
Profit-Seeking and Financial Rewards
A major factor behind the popularity of gambling is the prospect of financial rewards. Cryptocurrencies are infamously volatile, with the ability for prices to experience massive spikes (and crashes) over short time spans. This creates the allure of turning a small investment into enormous returns very quickly. Crypto gambling offers thrill-seekers a new way to scratch that itch. Players might find that the money they win is worth more than it was when they deposited it into their account, amplifying their winnings. Of course, it can also work the other way around, but this unpredictability is certainly appealing to many.
Emotional Drivers
Emotions also play a major role in decision-making for crypto gamblers. Positive excitement about a potential payout can lead to players playing more rounds in an attempt to recapture that feeling. Negative emotions like frustration after losing, on the other hand, can spur more bidding in an effort to break even.
Social Influences
Lastly, social influences help drive crypto gambling, especially with online communities where traders share strategies and winning outcomes. This can spark a fear of missing out, where people feel social pressure to jump into playing and a herd mentality takes over.
This also explains the typical demographic of the crypto-gambler. Young, educated people are more likely to be involved with the latest tech trends, and as such, feel the appeal of gambling with cryptocurrencies.
Key Takeaways
In summary, research is revealing that crypto gambling has very real psychological underpinnings. Key takeaways include:
- Crypto trading and gambling have structural similarities that appear to facilitate transfers of behavior between the two activities.
- Crypto gamblers are generally young, male, educated and financially well-off. They also tend to be highly knowledgeable about cryptocurrencies.
- Motivations stem from profit-seeking, excitement, intermittent reward patterns, emotional drivers, and social influences.
- Heavy involvement across cognitive, behavioral, and financial dimensions may signify increased play.