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Managing Risks When Betting with Bitcoin

By Hank Blaine

One of the barriers to crypto adoption is it's volatility. But the volatility in crypto, especially Bitcoin's volatility, is misunderstood. Volatility can be a good thing. When it comes to Bitcoin, volatility affecting each bitcoin can be to your advantage. Check out why volatility surrounding the Bitcoin blockchain isn’t necessarily a bad thing for online sportsbook handicappers..

How to Manage Crypto Volatility When Betting with Bitcoin

Defining volatility

Before diving deep into the issue of bitcoins and volatility, it's important for us to define exactly what we mean by volatility. The term volatility comes from the world of stock investing.

Volatility is simply a measure of how far the price of a security goes up or down from the average or mean. If a stock is volatile, it can have massive swings up or down. Options traders love volatility because they can use leverage to play a stock to go up via a call option or play a stock to go down via a put option.

Sports bettors have a form of volatility measured by spread lines. If Dallas is a -6 favorite against San Francisco, the mean is -6 on Dallas. How far the spread goes up or down is the volatility measure of the Dallas versus San Francisco spread line.

Why Bitcoins volatility is different from other forms of financial volatility

Although created in 2008, the Bitcoin blockchain remains a relatively young asset. Bitcoin is more than an asset. It’s also a store of value, and it’s a currency that people utilize to buy goods and service, or in our case, to bet on sports and casino games.

Because of the Bitcoin blockchain’s unique qualities, it’s volatility is a sign of strength, not of weakness. All forms of investment or currency utilization go through periods of volatility.

Eventually, the currency, asset market, or security (Bitcoin qualifies as all three) stabilizes. Think of the housing market crash of 2009 followed by the housing boom and then a period of stabilization.

The volatility in the housing market, the crash or boom, is only volatile because of what preceded it. We called the crash volatile because there was a boom based that preceded the crash.

In Bitcoin’s case, we call the 2022 cryptocurrency winter a crash because Bitcoin had risen to astronomical heights. But Bitcoin's crash wasn't a crash compared to prices from three or four years ago when BTC was trading at $18,000 or so.

Also, we must realize that Bitcoin is digital gold. What does that mean? It means that Bitcoin investors must dip into their gold during these times because the value of dollars is less now than before due to inflation.

Steps to managing crypto volatility when betting with Bitcoin

Now that we have some understanding of Bitcoin’s volatility, it’s important for us to take steps to manage BTC volatility when using bitcoins to wager.

1. Understand volatility and how Bitcoin volatility is different

We’ve completed the first step. We know that Bitcoin’s volatility is based on the fact it remains a young asset, but that because Bitcoin is more than just an asset, it’s a utilized currency and has a growing function in today’s world, Bitcoin’s volatility is different from traditional stock volatility.

2. Realize that Bitcoin’s volatility can work to your advantage

Bitcoin’s volatility can work to our advantage in the sense that since it’s both an asset, utilized currency, and store of value, we can take advantage of the volatility. How? Keep reading to find out.

3. When the price of Bitcoin goes down, put more BTC into your sports betting account

When the price of Bitcoin goes down, sportsbook and casino gamers should put more BTC into their Bitcoin gambling accounts.

Think of it this way. Warren Buffet knows when he has invested in a good company. So if the stock price of the company goes down, Buffet doesn’t bail. Instead, he invests more because he knows in the long run, the stock will pay dividends.

When you bet with Bitcoin and the price of a single bitcoin goes down, you should relish the chance, if you can of course, of putting more BTC into your sports betting account. The reason is that the BTC in your sports betting account represents your fiat currency of choice, probably, U.S. dollars.

So every time BTC goes up, you have more value for every single one of your wagers. What this means is that the value of your entire bankroll goes up. So when the price of BTC goes down, do what Warren would do and put more BTC into your sports betting account.

4. Only deposit and withdrawal in BTC

This is plain old financial common sense. If you must pay exorbitant fees to deposit with trditional currency, stop because you pay almost zero fees depositing bitcoins.

Now that you understand Bitcoin volatility and how it can be to your advantage as a sports bettor, you should consider only gambling through a bitcoin sportsbook and bitcoin casino.

Doing so means that in the long run, your bankroll will be much healthier than gambling in a traditional online sportsbook.

Where to Bet with Crypto

Sports betting odds are available here at Nitrobetting. Create a Nitrobetting account now to place your stakes on any of the top games every week.

This is just one of the many sports betting guides that you can read here at Nitrobetting news. Stay tuned for more previews, guides and articles.

READ MORE: The Psychology of Sports Betting Patterns