So, crypto’s been on a bit of a roller coaster lately, yeah?
But if you’d listened to our learned advice lo these last many months, you might just be sitting on a heap of cash this very day. In which case, you’re welcome.
That said, there’s still a long way to go before the market starts mirroring its former self circa 2021 H2. And, in a rather lame if ultimately always inevitable turn of events, a lot of crypto growth is going to be tied to the stock market.
Some of this, no doubt, is due to the fact that at the time of this 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, these are Tether (USDT, #3), USD Coin (USDC, #4), Binance USD (BUSD, #7), and Dai (DAI, #12). And, of course, before Terra LUNA took a dump and took Terra USD with it, five of the top 15 cryptos were stablecoins.
Now, stablecoins aren’t all bad.
In fact, they’re an important part of a nutritious crypto marketplace. They also boast a tremendous amount of utility for crypto investors and crypto traders.
However, for sports gambling, as we’ve said many times in the past – and as you’ll read in our Tether betting and USD Coin betting guides – stablecoins aren’t the best option. At least, not for our purposes.
But it’s occurred to us that some sports bettors – particularly sports bettors just getting started gambling online or those just getting used to the idea of crypto in general – might not understand the whys and wherefores of stablecoin betting in general.
We think the issues – the pros and cons – may need a bit more clarification.
To that end, you can consider this little writeup to be something slightly more than the tip of the iceberg, albeit with all the usual caveats of there’s a whole lot more to all this if you want to dive deeper.
The Benefits of Betting With Stablecoins
First things first, let’s talk about the benefits of using stablecoins to fund your bets and/or claim your payouts.
For seasoned crypto users and online gamblers, these likely won’t be compelling, but that’s not really the point in the first place.
Stablecoins – as offered for use at the legal online sportsbooks we recommend – are “gateway” cryptos. And that’s where the entirety of their utility lies.
A FAMILIAR CONCEPT
With stablecoins like USDT and USDC, a dollar is a dollar. And because these aren’t shitcoin scams like LUNA turned out to be (replete with the only mea culpa you’re ever going to get out of me), that will probably never change.
For crypto newcomers, this reliance on an already familiar mode of trade means less stress and anxiety making the switch. Over time, the simple act of using cryptocurrency instead of fiat currency will acclimate users to the former in all its forms, and they’ll eventually graduate to proper assets like Cardano, Solana, Avalanche, etc.
NO SCARY VOLATILITY
One of the biggest issues for those thinking about getting started with cryptocurrency – that is, one of the biggest things that holds these people back – is the unprecedented market volatility of most coins.
For those who don’t understand the machinations behind the extreme daily and weekly and monthly ups and downs of assets like Bitcoin et al., stablecoins are an easier sell across the board. You won’t lose any money buying into a stablecoin or betting with a stablecoin. Unless you lose your bets.
NO CONVERSIONS TO WORRY ABOUT
Stablecoin buying and selling – or, rather, USD-to-stablecoin and stablecoin-to-USD transfers – don’t require any monetary conversions. As such, everything is as straightforward as possible.
To be sure, conversions aren’t a huge deal for most people, but you’d be surprised at how daunting they can be for some.
The Negatives of Betting With Stablecoins
The positives outlined above are all well and good, but there’s a reason why most online gamblers give up the ghost on stablecoins like Tether and USD Coin after their first few crypto deposits and withdrawals. That’s the “graduation” referred to above, and it’s just a part of the process.
The following reasons are why you’ll ultimately prefer to bet sports online with cryptos other than USDT and USDC:
ZERO INVESTMENT POTENTIAL
This is a bit of a “hot take” because there are arguments in favor of the utility of using stablecoins for investing. Stablecoins have their place in that regard, particularly when it comes to hedging and swing trading.
Additionally, such coins can be a safe harbor during times of crypto downturns, even if they can be a liability during times when everything’s to the moon.
That said, most cryptos supported by the top betting sites are top cryptos with the actual potential to appreciate in value over time. That is, you can buy this crypto, bet with it, have your winnings sent into your crypto wallet, and then hold that crypto for an indefinite period of time as its value goes up.
With stablecoins pegged 1:1 to the US dollar, though, their values will never go up because the value of the dollar has never gone up. The dollar depreciates. That’s what it does. How much was your last hamburger?
NO FREE STABLECOINS
With stablecoins, there’s no “mining” or “staking” to generate the coins and their values. Instead, stablecoin value is derived from its 1:1 relationship with its associated asset – in this case, the US dollar.
So just as stablecoins aren’t good investments because they can’t appreciate (unless some radical shift in historic monetary policy falls out of the sky and saves us all), you can’t earn free Tether or free USD Coins, either.
With Proof-of-Work coins like Bitcoin, Ethereum, Litecoin, etc., you can set up mining rigs and make a free buck. With Proof-of-Stake coins like Cardano and Solana, you can pledge your coins to stake pools and earn passive income. With stablecoins, you can do neither.
BIG TRANSFER FEES
One of the downsides 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 hands down the most expensive crypto network out there.
If you want to keep more of your money for gambling, most coins cost a fraction of what stablecoins cost to move to and from your online sportsbook account.
LONG TRANSFER TIMES
The reason ETH-based stablecoins cost so much to use is that they take so long to process. That lead time is necessitated by the complex structures of the blockchain calculations required, and it’s something that can’t really be changed (at least, not until Ethereum 2.0 launches or, alternatively, these stablecoins expand operations atop other much faster next-gen networks).
But lengthy transfer times also mean that stablecoins are going to be inadequate for bettors who need to top up their accounts ASAP.
If you need money in your sportsbook wallet so you can 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 dollars to your bankroll so you can get in on some juicy live betting lines, same deal.
Should You or Shouldn’t You?
All the above notwithstanding, it’s important to reiterate that stablecoins do have their place in the online sports betting marketplace. But in our view, for all but a very few bettors, USDT and USDC – and any other conventional stablecoins the best online sportsbooks might add to their banking menus in the future – are best reserved for first-time crypto bettors.
If you’re on the fence about betting online with crypto – or if you’re on the fence about crypto generally – stablecoins are a good place to start. They’re stable coins.
But like all gamblers, the unstable coins are eventually where you’re going to end up.