Is Cryptocurrency Trading A Game Of Luck? The Dark Side Of Risky Trading Strategies

The pathogenic virus remains a global healthcare crisis to this day, claiming thousands of lives every day and significant economic disruption.

Crypto and the Pandemic

Crypto, however, seemed to be immune to the limitations of this pandemic, outperforming the traditional markets many times over. By the end of 2020, Bitcoin, the world’s most valuable cryptocurrency, had crossed the $20k mark, going on to more than tripling to $64k in May 2021.

Cryptocurrency holders, believing in the cause of the movement, couldn’t be talked out and were pretty much excited, riding on FOMO. Some made a fortune while others, despite rising asset prices, got their fingers burnt. Many more are yet to recover even as cryptocurrency expands. So mainstream are some digital assets that the U.S. SEC recently approved a complex product tracking the Bitcoin Futures prices.

Crypto Gambling

The question is: is cryptocurrency trading a game of luck? What’s the fine line between trading and gambling in cryptocurrency?

To understand this, we must know the difference between trading and gambling. On the one hand, trading could involve an expert who, sometimes based on facts and other times a candlestick arrangement, predicts the price of an asset with proper risk management practices in place, believing their art/skill is an investment.

Yet on the betting corner, gamblers are usually in for the short-term and only on a single lever which dictates whether they win or lose. Typically, gamblers are infatuated with more wins—forgetting that every move is inherently risky. Specifically, they don’t employ any strategy since winnings are random and can, in some instances, be set up by the house.

Trading, therefore, is a game of strategy where carelessness is stiffly penalized while those who keep themselves together even in tumultuous periods can win—if they are disciplined. There is no randomness in the equation, and prices—in an efficient market—are determined by supply and demand forces.

Fine Line Between Investing, Trading and Gambling

However, the fine line between trading and gambling can be blurred if one is tactless and acts on emotions. This impulsiveness in cryptocurrency is especially dangerous considering that crypto is still developing and volatile as an emerging asset class.

Additionally, boxing in the element of regulation makes cryptocurrency a Wild West for traders. You can quickly be a victim in the wilderness of crypto lawlessness, part of the reason why the SEC, despite its openness and willingness to embrace cryptocurrency, is also hesitant on some end.

Traders who don’t pay attention to details are paying the ultimate price. Their accounts have been wiped clean, and their finances ruined in a split second. As mentioned above, the unhealthy blend of high volatility, impatience, crowd influence, and the tinge of lawlessness is a blade slicing through trading hearts. In fact, some cryptocurrency trading platforms weren’t making the situation any better.

The access to ultra-high leverage by non-U.S. based exchanges on margin accounts aware that cryptocurrencies are inherently volatile is why most observers, averse to high volatility and turned off by regulatory blindness, term crypto trading gambling.

The Desire to Get Rich Quick

Still, this isn’t preventing ordinary users and traders who are in awe of the success of those who made it big. The so-called cryptocurrency influencers further exacerbate the situation. In Q3 2021, BitBoy, a YouTube personality focused on Bitcoin and cryptocurrency, was temporarily suspended.

According to YouTube, he had violated their terms and conditions. Critics supported YouTube for their action, while some argued that BitBoy wasn’t actually doing anything wrong. This is where it gets confusing because the personality has over one million followers and is guilty of “shilling” projects every day, claiming that certain tokens would “moon.” Notably, at the end of his program, there was a disclaimer that he’s not a financial advisor and that users should do due diligence.

Trouble is, most FOMOing, inexperienced traders tend to ignore these disclaimers. Because the crypto personality with “insider” knowledge is endorsing the project, they go “all in.” Since YouTube—and pretty much every other social platform—is open to the public, anyone can be an analyst and influence. There are no credentials needed or threshold requirements to dispense crypto wisdom and read the crypto crystal ball.


While crypto is proving useful and is increasingly being adopted, the financial lives of a few are being changed. The herd and crypto gamblers—folks who don’t do their due diligence and trade responsibly—bear the brunt as their lives are ruined. Many neutral observers are adamant that cryptocurrencies are so risky that they shouldn’t be considered investments but gamblers.

Crypto supporters will, as expected, oppose this projection. However, from an investment perspective, a trader will only be a cryptocurrency gambler if they have no strategy, floating about without a rudder and tact. This is the only differentiating aspect between trading and gambling, applicable in every other finance class.

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