Double Your Bitcoin in a Weekend…If You Were Quick

betting using bitcoin

To my father, February means no alcohol as he takes on the Feb Fast challenge. But to me, it’s the start of another basketball season.

It’s not the sport I enjoy as much as spending time with friends. Almost every weekend we talk about the latest events.

I wouldn’t call it an intellectual debate. Rather it’s just a bit of banter among the boys.

For the past few months, the topic that’s always comes up is bitcoin.

When will it bottom out? Is it a bargain right now? Should I buy? They ask me these kinds of questions almost every week.

Last week was no different. But one of my teammates wanted to know why governments have been so hard on cryptocurrencies, especially those of developing nations.

I’m sure it hasn’t gone over your head that China, India and many others have simply said no to bitcoin.

The typical reasoning is to protect their citizens.

China and India both have massive populations, a large part of which are growing wealthier.

This is ideal for both nations, as households will have higher disposable incomes, leading them to spend more, and encouraging businesses to produce more.

The last thing they want is for these households to start buying speculative assets.

Of course, these governments also have other interests to protect.

For one, it’s difficult or impossible to generate tax revenues from crypto profits.

I’m sure they’re not too happy about the limited information that can be gathered from most crypto transactions, either.

For example, in a bitcoin transaction you can only see the amount transferred from one wallet to another.

You can’t see what the good or service was, or who each party in the transaction actually is. It means governments can’t easily spy on their citizens. Good for us, bad for them.

Because they can’t control it, governments are forcibly removing buyers from the market.

That’s largely why the price of bitcoin has dropped more than 60% since its high last year. The total value of cryptocurrencies is also down more than 60% over the same time.

Yet even as crypto prices tank, you still could’ve doubled your bitcoins over the weekend. 

Betting with bitcoin

Many believe buying bitcoin is equivalent to gambling.

But over the weekend you could have actually gambled with bitcoin.

Last week, Neds, an online Aussie wagering company, said they will launch a fully functioning cryptocurrency betting site. Customers can deposit, bet and withdraw in bitcoin.

Thus, you could theoretically place a bet on the ponies in bitcoin, and receive your winning in bitcoin.

According to the Australian Financial Review (AFR):

Neds chief executive Paul Cherry told The Australian Financial Review he did not believe the move was a stunt but that many of the firm’s younger staff members and its target demographic of 18-35-year-old males were familiar with or already investing in cryptocurrencies.

Cherry also said Neds will pay up to 2.5% of any transaction fees for bitcoin.

Yet almost as soon as they offered bitcoin betting, regulators quickly put it to bed. On Monday, the AFR got wind of an email sent around by the Northern Territory Racing Commission (NTRC).

In the email, which was sent to Neds, the Commission asked for all corporate bookmarkers registered in the territory to stop accepting bitcoin for bets:

The chairman of the Racing Commission…is intending to issue a formal communique to all sports bookmakers and betting exchange operators licensed in the NT if currently transacting in cryptocurrency (for example Bitcoin, Ethereum and the like) for their wagering operations to immediately cease and desist.’

The crypto.neds.com.au site is now down, with a message that reads:

Thank you for your interest in Neds Crypto. Our site it currently offline pending further instruction from NT Racing Commission.

Toeing the line

What’s puzzling to me is why the NTRC even has a problem with bitcoin. Why don’t they want bookmakers to accept cryptos?

Maybe withdrawals could be a problem down the line. By giving punters the option to withdraw, Neds might need to hold actual bitcoin. Such a situation could leave the bookie a target for hackers.

Already in 2018, hackers pulled off a $493 million heist of the Japanese exchange, Coincheck. The exchange has said they will reimburse users. But it again raises concerns around the potential risks of holding bitcoin, especially if it’s a third party.

Our cryptocurrency expert, Sam Volkering told me a far simpler reason for why the NTRC might be down on bitcoin.

They don’t want a falling out with the government. Because governments are shunning cryptos, the NTRC will toe the line.

It’s not clear for how long the ban will stand. Or what effect it will have on the bitcoin price. For bitcoin to succeed as an alternate currency, it has to expand in use. That’s more difficult if regulators quash it at every turn.

It was government crackdowns on bitcoin that triggered the current volatility. Investors began to panic after South Korea’s government said that it will ban cryptocurrency trading in the country.

More governments around the world have followed suit since. And bitcoin has continued to fall.

Many of bitcoin’s supporters argue that governments couldn’t block the crypto if they wanted to. That it’s part of the point. And that this year’s falls are the result of ‘weak hands’ panicking. Those who saw the massive gains bitcoin made in 2017, and jumped on the bandwagon without ever really understanding it. They bought because of fear of missing out. They’re selling because of fear of regulation. But they never really believed in the potential revolution that bitcoin could represent.

If that’s the case, this year’s falls could represent an incredible buying opportunity.

Of course if it isn’t, bitcoin may soon be regulated out of existence.

Either way, I’m sure we’ll be talking about it after next week’s game.

Kind regards,

Harje Ronngard,
Editor, Money Morning

Harje Ronngard

Harje Ronngard

Harje Ronngard is the lead Editor at Money Morning. With an academic background in finance and investments, Harje knows how simple, yet difficult investing can be. He has worked with a range of assets classes, from futures to equities. But he’s found his niche in equity valuation.

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