So, crypto has been on a roller coaster ride lately, yeah?
Oh yeah.
But if you’d listened to our learned advice over the past few months, you could be sitting on a pile of money today. In that case you are welcome.
However, there is still a long way to go before the market starts to reflect its former self around 2021 H2. And in a rather lame, if ultimately always inevitable, turn of events, much of the crypto growth will be tied to the stock market.
Some of this is no doubt due to the fact that at the time of writing, three of the top 10 cryptos — and four of the top 15 cryptos — are all stablecoins pegged 1:1 to the US dollar.
In order, they are Tether (USDT, #3), USD Coin (USDC, #4), Binance USD (BUSD, #7), and Dai (DAI, #12). And of course, before Terra dumped LUNA and took Terra USD, five of the top 15 cryptos were stablecoins.
Well, stablecoins aren’t all bad.
In fact, they are an important part of a nutritious crypto marketplace. They also offer tremendous utility for crypto investors and crypto traders.
However, for sports betting, as we have said many times in the past – and as you will read in our Tether betting and USD coin betting guides – stablecoins are not the best option. At least not for our purposes.
But we’ve noticed that some sports bettors – particularly sports bettors who are just starting to gamble online or those who are just getting used to the idea of crypto in general – don’t understand the whys and wherefores of stablecoin betting in general.
We think the issues – the pros and cons – need a little more clarification.
To that end, you can take this little description as a little more than the tip of the iceberg, albeit with all the usual caveats that there’s a lot more to all of this if you want to delve deeper.
The advantages of betting with stablecoins
First, let’s talk about the benefits of using stablecoins to fund your bets and/or collect your withdrawals.
For experienced crypto users and online gamers, these probably won’t be convincing, but that’s not really the point in the first place.
Stablecoins – such as those offered for use in the legit online sportsbooks we recommend – are “gateway” cryptos. And therein lies the totality of its usefulness.
A WELL-KNOWN CONCEPT
For stablecoins like USDT and USDC, one dollar is one dollar. And because these aren’t shitcoin scams, as it turned out, as LUNA turned out to be (crammed full of the only mea culpa you’ll ever get out of me), that will likely never change.
For crypto newbies, this reliance on an already familiar way of trading means less stress and anxiety about switching. Over time, the simple act of using cryptocurrency instead of fiat currency will accustom users to the former in all its forms, and they will eventually move to proper assets like Cardano, Solana, Avalanche, etc.
NO HORRIBLE VOLATILITY
One of the biggest problems for those thinking about getting started in cryptocurrency – that is, one of the biggest things holding these people back – is the unprecedented market volatility of most coins.
For those who understand the machinations behind the extreme daily, weekly, and monthly ups and downs of assets like Bitcoin et al. don’t understand, stablecoins are generally easier to sell. You do not lose money when you buy or bet with a stablecoin. Unless you lose your bets.
NO CONVERSIONS TO WORRY
Stablecoin purchases and sales – or rather, USD-to-stablecoin and stablecoin-to-USD transfers – do not require currency conversions. So everything is as simple as possible.
Of course, conversions aren’t a big deal for most people, but you might be surprised at how daunting they can be for some.
The disadvantages of betting with stablecoins
The positives outlined above are all well and good, but there’s a reason why most online gamers give up on stablecoins like Tether and USD Coin after their first crypto deposits and withdrawals. This is the “graduation” mentioned above, and it is only part of the process.
The following reasons are why you will ultimately prefer to bet sports online using cryptos other than USDT and USDC:
NO INVESTMENT POTENTIAL
This is a bit “hot” because there are arguments in favor of the usefulness of using stablecoins for investing. Stablecoins have their place in this regard, especially when it comes to hedging and swing trading.
Additionally, such coins can be a safe haven during times of crypto downturns, although they can be a drag during times when everything is on the moon.
However, most cryptos supported by the top betting sites are top cryptos with actual potential to increase in value over time. This means you can buy that crypto, bet with it, have your winnings sent to your crypto wallet, and then hold that crypto indefinitely as its value increases.
However, with stablecoins pegged 1:1 to the US dollar, their value will never increase because the value of the dollar has never increased. The dollar depreciates. It does. How much did your last hamburger cost?
NO FREE STABLECOINS
With stablecoins, there is no “mining” or “staking” to generate the coins and their values. Instead, the stablecoin’s value is derived from its 1:1 relationship with its associated asset – in this case, the US dollar.
Just like stablecoins aren’t good investments because they can’t be valued (unless a radical change in historical monetary policy falls out of the sky and saves us all), you can’t earn free tether or free USD coins either.
You can set up mining rigs and make money for free using proof-of-work coins like bitcoin, ethereum, litecoin, etc. Proof-of-stake coins like Cardano and Solana allow you to pledge your coins to stake pools and generate passive income. You can’t do both with stablecoins.
LARGE TRANSFER FEES
One of the disadvantages of stablecoins – especially for online gambling applications – is that they cost a lot to use. At least comparatively. Since USDT and USDC – as used by the sports betting sites you know and love – are both Ethereum tokens, they fall victim to Ethereum fees.
And Ethereum is undoubtedly the most expensive crypto network out there.
If you want to keep more of your gambling money, most coins cost a fraction of what stablecoins cost to transfer to and from your online sports betting account.
LONG TRANSMISSION TIMES
The reason why ETH-based stablecoins cost so much is that they take so long to process. This lead time is necessitated by the complex structures of blockchain calculations required and cannot really be changed (at least not until the launch of Ethereum 2.0 or alternatively these stablecoins expand operations to other much faster next-generation networks).
But long transfer times also mean that stablecoins will be unsuitable for bettors who need to fund their accounts as quickly as possible.
If you need money in your sportsbook wallet to bet on a game that starts in 15 minutes, USDT and USDC won’t get you there. If you’re in the middle of a game and want to add a few bucks to your bankroll so you can take part in some juicy live betting lines, the same goes.
Should you or shouldn’t you?
That notwithstanding, it is important to reiterate that stablecoins have their place in the online sports betting marketplace. But in our view, USDT and USDC – and all other conventional stablecoins that the best online sportsbooks may add to their banking menus in the future – are best reserved for first-time crypto bettors for all but a very few bettors.
If you’re undecided about betting crypto online — or if you’re undecided about crypto in general — stablecoins are a great place to start. They are stablecoins.
But like all players, you will eventually end up with the unstable coins.