Year in Review: Bitcoin and Online Gambling in 2018

It’s safe to say that 2018 was a year of ups and downs—-mostly downs—-for bitcoin. Large drops in value saw the cryptocurrency come under question, but what has this meant for its relationship with online gambling? Let’s find out.


Bitcoin and online gambling

The history of bitcoin and online gambling goes back a few years now; online casinos in particular were quick to identify the potential benefits it could bring to the industry. For many it still feels like a relatively new and novel payment method, but bitcoin has now definitely made its mark on online gambling. In 2013, 50% of all bitcoin transactions were gambling-related, and around 3.7 million bitcoin was wagered from 2014-2017, working out at at roughly $4.5 billion worth of bets.


It’s not hard to find a bitcoin gambling site, either—-a simple Google search reveals a large number of “cryptocasinos” which run primarily on the likes of bitcoin, ethereum and other virtual currencies. But it’s not just these niche bitcoin casinos that allow customers to deposit with cryptocurrency—-major casino brands, such as Mansion, now offer it as a deposit option too.


Winning Poker Network is another prominent site that’s become known for its acceptance of bitcoin deposits. A spokesman for the US site, which took its first bitcoin payment in 2015, said in October 2018 that bitcoin and other cryptocurrencies now account for 60% of all transactions made across the network.


Bitcoin hasn’t just infiltrated the online casino industry. As well as using it to wager on games like roulette and blackjack, gamblers are also using it for sports betting. Sites such as Cloudbet hold valid licenses from the gambling authorities of countries like Curaçao, and let punters wager on everything from football and tennis to golf and horse racing.


Why do gamblers use bitcoin?

The advantages that make bitcoin enticing to online gamblers are generally the same as those that attract people to cryptocurrencies in general. For starters, bitcoin cuts out the middleman, so gamblers can do away with bank cards and e-wallets like PayPal and the fees that come with them.


This means that bitcoin provides an anonymity, privacy and transparency that just isn’t available with other banking options. Throw in the fact that it’s a secure and fast payment method, as well as a universal currency ideal for cross-border transactions, and it’s easy to see the attraction for online gamblers.


However, that’s not to say that it’s a perfect banking option. One downside is that the cryptocurrency is nowhere near as widely as accepted as other casino payment methods, which means bitcoin gamblers are mostly restricted to niche sites rather than the most popular brands.


The biggest issue, though, is its volatility, with 2018 being a perfect example of just how unpredictable cryptocurrencies can be. While you don’t have to be a tech wiz to buy and bet with bitcoin, you do need at least some background knowledge and understanding of it and how it can fluctuate. Otherwise, you risk making an ill-advised investment and potentially losing money.


This means that bitcoin isn’t always suited to your regular day-to-day punter. But for gamblers that have experience using it and who are looking for the anonymity and transparency that bitcoin offers, there are few better options.


What happened in 2018?

To put 2018 in perspective we need to look back at 2017, which by all accounts was a pretty incredible year for bitcoin. The cryptocurrency hit new highs in terms of value when it reached $19,783.06 in December. This rapid rise in value saw bitcoin attract major mainstream attention and burst into the public consciousness, becoming Google’s second most searched news topic of 2017.


Unfortunately, 2018 wasn’t quite as prosperous, to say the least. Things got off to a bad start—-January saw South Korea introduce regulation that banned anonymous bitcoin trading by forcing traders to reveal their identity. China, home to one of the largest number of bitcoin miners, also cracked down on cryptocurrencies, while India announced that it didn’t consider bitcoin as legal tender.


It wasn’t just countries placing restrictions, either. In the same month, online payment company Stripe announced plans to stop accepting bitcoin, one of the reasons being declining demand. The start of the year also saw Facebook ban all cryptocurrency adverts from its platform. Google and Twitter followed suit in March, although all three partially relaxed their bans later in the year. After the 2017 boom, bitcoin’s value fell over 60% from January through to February.


The situation didn’t improve much over the following months. Fast forward to June, and bitcoin saw a fall of 10% to $6,627 after South Korean cryptocurrency exchange Coinrail was hacked and lost over $30 million worth of digital coins. In the same month, Bithumb, another South Korean exchange, was also hacked and lost a similar amount.


August saw another plunge to $6,300 as the US Securities and Exchange Commission (SEC) postponed a decision on a proposed bitcoin exchange-traded fund. In September, Goldman Sachs announced that it had abandoned its plans for bitcoin trading due to a lack of clarity regarding regulatory framework, another move that negatively affected the value of the cryptocurrency.


If that sounded bad, then things really took a turn for the worst in mid-November, when bitcoin and other cryptocurrencies experienced a drastic crash. Falling below $6,000 and then $5,000, the bubble had well and truly burst. On the 17th December—-exactly a year on from its peak high of just under $20,000—-the cryptocurrency was valued at a little over $3,500. This meant a total decline of almost 80% from the value of $17,000 at the start of 2018, the lowest point in seven years.


What does this mean for bitcoin gambling?

As the above shows, bitcoin really didn’t have much to shout about in 2018. But, while the year may have been a disappointment for bitcoin investors and traders, the same isn’t necessarily true for bitcoin gamblers. In fact, while the long-term effects of the November crash are still uncertain, several major developments and a continued demand mean that the relationship between bitcoin and online gambling has grown stronger.


While the likes of China and India started the year by cracking down on bitcoin and other cryptocurrencies, other countries were taking steps towards creating a more crypto-friendly environment. In January, Gibraltar, a hub for both online and land-based gambling, introduced legislation designed to protect cryptocurrency users.


Malta made a similar move in July when it introduced a regulatory framework for blockchain, cryptocurrency and distributed ledger technology (DLT). Like Gibraltar, Malta is a key player in the gambling world, providing licenses to casinos, sportsbooks and software developers. The move to promote and legitimise crypto-based businesses in these countries can only be good news for the world of online bitcoin gambling.


Of course, not all countries have taken such a favourable view. In Australia, online sportsbook Neds became the country’s first to launch bitcoin betting in February, only for the Australian gambling regulator to issue a ban on cryptocurrency online wagering several days later. This was in part due to the fears that it could facilitate illegal activities such as match fixing and money laundering, something which the laws introduced by Malta and Gibraltar aim to prevent.


Not that the Australian ban seemed to completely deter crypto gambling Down Under, with the large volume of bitcoin bets on the 2018 Melbourne Cup making headlines. Bitcoin also proved popular with horse racing punters in the US. Racing betting site AmWager announced in July that it would start accepting bitcoin, and the high volume of cryptocurrency bets on the Kentucky Derby also hit the news.


By far the biggest sporting event of the year, though, was the FIFA World Cup, and you certainly didn’t have to look far to find a site taking bitcoin bets. Cryptocurrencies weren’t only being used to bet on the football, either. Hosted in Russia, there were hotels, airlines, travel agents and even bars taking bitcoin payments.


A wide range of thriving cryptocasinos and betting sites can be easily accessed via search engines, showing that the 2018 crash hasn’t diminished the demand or availability of online bitcoin gambling. The gambling industry as a whole is booming, and a study published in September, which estimated that global gambling revenues will hit a record $525 billion by 2023, identified bitcoin gambling as a trend that will contribute to this rise.


Of course, the 2018 crash doesn’t mean that bitcoin can’t recover and reach its previous highs. Bitcoin hit $4,000 mark on 20th December has spent the time since drifting slightly under and over that value. As always, its performance is polarising commentators. While many maintain a pessimistic view of 2018 for bitcoin, others believe that bitcoin’s 2018 wasn’t as bad as others make out—-after all, it wasn’t the only cryptocurrency to have suffered that year.


What we can say is that, despite the performance of the cryptocurrency itself, overall 2018 has seen the relationship between bitcoin and online gambling grow further. Continued demand, new crypto gambling sites and a high volume of bitcoin bets show this. Of course, the story isn’t the same in every part of the world, but in gambling and cryptocurrency-friendly countries the industry is definitely still going strong.


What does the future hold?

Even the most experienced forecasters can get crypto predictions drastically wrong, so any predictions for 2019 should be taken with a pinch of salt. However, there is reason to be optimistic. While some see more doom and gloom ahead, there are plenty of commentators that anticipate a bright future for bitcoin and bitcoin casinos. After all, bitcoin has become an established and popular option for online gamblers across parts of the world, so it’s not going to give up that easily.


What we can be confident in saying is that 2019 looks like it could be a big year for bitcoin and online gambling. Continue to plummet and it becomes harder to see positives, but stabilise and grow and we’re sure to see bitcoin become more and more of a key player in the online gambling world.


Many people, from web commentators to Global Gaming Expo panelists, continue to ask the question: is bitcoin the future of online casinos? Of course, there’s still a long way to go before it overtakes traditional payment methods, and there’s bound to be obstacles along the way, but we think the future definitely looks bright for bitcoin and online gambling.