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Cryptocurrency is a lot like sports betting.
Is cryptocurrency an investment? While more than three-quarters of its buyers say that they want a different way to invest—as if this has anything to do with whether an investment is good or not—a recent Pew Research survey found that half of cryptocurrency buyers said that thinking it’s a good way to make money was only a minor reason they bought it. A full quarter of buyers didn’t think it’s a good way to make money. And more than 40 percent of its buyers wanted “to be part of a community.”
I can think of another group of guys I know who all make the same “investment,” in the loosest sense, and as a result are part of a community. They are betting on sports. They bet the same way on a game and so share the same rooting interest. That’s what buying crypto is to a lot of the little fish with money in it—it’s not really investing, it’s sports betting.
There are plenty of surface-level similarities. They both appeal most to young men. In recent years, a combination of technological advancement and lax regulation has made it easy for you to do both on your phone. Ads everywhere promote both, although I hope crypto’s bad past few months will cut down on that. (Maybe it’s because I am a male sports fan between the ages of 18 and 34 and so part of the target demographic, but I have been served ads for sports betting in every conceivable space online.)
You can find plenty of people on the internet who are very happy to explain to you that either online sports betting or cryptocurrency is the future. But even if it is not the future, it’s fun. Both are about the intensifying feeling of having money on the line. As Freddy Eynsford-Hill says to Eliza Doolittle in My Fair Lady, “I have a bet on number seven. I should be so happy if you would take it. You’ll enjoy the race ever so much more.”
The human tendency to loss aversion—that is, most people feel the loss of a given amount of money more than they do the gain of an equivalent amount—drives a quirk of both crypto and sports-betting culture, especially among those with less experience or knowledge: the focus on and valorization of people who made lots of money off of tiny investments, even, perhaps especially, if the process that delivered that result was bad. Putting a little money in Bitcoin in 2012 and holding on was possibly a good process. Betting a 17-leg parlay is definitely not. People who are being paid to do so and who should know better are happy to tell you about both, with the implication that it could be you.
And it is right there in front of you—all you had to do was put a few dollars in Bitcoin a decade ago and, depending on when exactly you did so, have the down payment for a house. Or a house. Or several houses. The chart makes it seem so simple. And when the crypto community talks about “diamond hands” and “going to the moon”, well, maybe it wasn’t too late for you after all, and the line will keep going up, and there are all these new coins, and maybe Elon Musk will tweet about this one like he did Dogecoin, and the line will keep going up in saecula saeculorum, and, and, and—
—and then it turns out you have lost all the money in a “shitcoin” pump-and-dump scheme. And then it turns out that Sam Bankman-Fried mishandled billions in customer funds. And then, strangest of all, it turns out, perhaps, that people who were throwing money into crypto started throwing it into sports betting instead, and the crypto world needed some of that money to keep the lights on and the music playing.
Sports have an advantage over crypto in that sports themselves are more fun than the blockchain. When you win your bet, you feel good. When you lose, you feel bad. Maybe you blame the refs or the decision-making of the coaches or the vagaries of fate. But it is all rather self-contained. Crypto, though? You’re not just betting on the Giants. You’re betting on a new coin. You’re betting on a transformation of the world. The other side wasn’t just wrong about the outcome of a game: they were wrong about everything.
You are betting that traditional finance and all the damage it does, all the crashes it causes, all the people in it with more money than you, are about to be washed away. Most of all, you’re betting on you. It doesn’t matter what everyone else is saying. You are smart. You see the way the world is going. You’re going to get in now, on the ground floor, and they’ll all be sorry that they didn’t listen to you and your superior insight. You and your new friends on Reddit or on Discord servers, united by your shared desire to see the line go up, will inherit the earth. The world could be yours.
And if you lose the money? You could always blame those who feel threatened by crypto and don’t want to see it succeed. But even if one coin goes to zero, even if one company declares bankruptcy, there will always be others. Just make a new bet tomorrow. Maybe tomorrow it will pay off. Crypto is the underdog, the greatest underdog there’s ever been. How are sports supposed to compete with that?
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