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The past several weeks have been historic for cryptocurrencies. Bitcoin continues to fall to new lows, causing a market collapse of lesser-known cryptocurrencies. The market decline has prompted consumers and analysts to question the long-term viability of all new currencies. This is especially true for its use in online casinos and sports betting.
Bitcoin plummeted 7.8 percent last week. On Saturday, the price reached a low of $17,592.78. The price has not been this low since December 2020.
This year, cryptocurrencies have lost roughly 60 percent of their market value. This month alone, its value dropped by 37 percent. And while recovering 7 percent at the beginning of this week, financial analysts around the world have used the term "crypto meltdown" to describe the devastating loss.
In response to Bitcoin's decline, smaller cryptocurrencies have also taken action. Recently, US-based crypto lender Celsius stopped withdrawals and transfers between user accounts and suspended withdrawals for customers.
As inflation in the world's largest economy climbs, rumours of further Federal Reserve interest rate hikes for the United States have put pressure on riskier assets such as cryptocurrencies and equities.
But what do these developments signify for the future of crypto and casinos and the market?
Casinos Embrace Crypto
Almost immediately after the proliferation of cryptocurrencies, the igaming sector recognised the chance to become engaged. Cryptocurrency casinos have sprouted up all over the world, including notable brands like as Bitcasino, FortuneJack, and 1xbit.
Zynga began testing bitcoin for in-game purchases in a number of their titles at the beginning of 2014. Simultaneously, the D Las Vegas Casino Hotel and the Golden Gate Hotel & Casino also announced that they will take bitcoin.
Between 2013 and 2014, platform supplier Softswiss recalled launching between three and four bitcoin casinos every month in the early years. While many did not survive the several economic downturns that have occurred since then, many have. As with any economic slowdown, these "crypto winters" tend to separate the most robust enterprises from the others, allowing them to have a stronger foothold in the market when it recovers.
The Prospects for Crypto Casinos
Prior to this year's monumental crypto meltdown, there was a massive crossover between bitcoin and sports betting in the United States. The Super Bowl was called the "Crypto Bowl" when prominent cryptocurrency firms, including Coinbase, Crypto.com, and FTX, competed for primetime advertising spaces. The value of the slots was estimated between $7 million and $14 million.
Even with the significant decline in the market capitalization of cryptocurrencies, DraftKings CEO Jason Robins has expressed interest in incorporating cryptocurrencies into the operators' offerings. However, he has not provided a clear implementation timeline.
Certainly, people want it," he stated on the gm podcast for Decrypt last month. "Without a doubt, we should be able to achieve it in the market. So we're working towards that."
In July 2021, the daily fantasy sports and sports betting behemoth entered the non-fungible token (NFT) market by introducing an exclusive marketplace for purchasing, selling, and trading non-fungible tokens from NFL star Tom Brady's Autograph collection.
The Crypto Currency Crash of 2022
Since May, the crypto market has been shaken by its most significant decline to date.
Bitcoin dropped to a low of $20,950.82 on June 14 following the unforeseen collapse of Terra USD — a so-called stablecoin, a cryptocurrency backed by fiat currency and whose price seldom fluctuates – and its sister cryptocurrency, LUNA, in May.
Terra was one of a number of initiatives in recent years to tame the famed volatility of cryptocurrencies by pegging their values to fiat currencies, hence its moniker as'stable' coins. The idea is that they would track the value of fiat and be immune to the volatility that otherwise defines crypto.
As a result of the uncertainty caused by these failures, the cryptocurrency industry has entered a "crypto winter," which many crypto aficionados believe is a short slowdown. They have faith that it can be endured if they stand their ground and wait for the inevitable gradual thawing and recovery.
While a crypto winter is bad news for crypto start-ups and businesses with inadequate liquidity to withstand it, most existing crypto casinos will likely survive and profit even more when the market begins to rise again. However, the economic slump will unquestionably impede the rate at which others embrace crypto for their operations.
It remains to be seen, however, how the decline in the cryptocurrency market will effect the acceptance of cryptocurrencies by casinos and sportsbooks.
By fLEXI tEAM