This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Bitcoin – The Ultimate Multiplayer Game?


Chief Strategist at Interactive Brokers

Cryptocurrencies are in the news this morning, as many investors woke up to see Bitcoin plunging by over 20% since last Friday.  Actually, it would have only been news to those who watch cryptocurrencies during normal business hours, as the plunge began in earnest over the weekend.  And when I say “over the weekend”, I don’t mean Asian trading hours that begin on Sunday evening, I actually mean Sunday morning Eastern time.  Yes, for those of you who were previously unaware, Bitcoin trades 7 days a week, 24 hours a day.  Like a major casino, the Bitcoin market never closes.

It is just one of many ways that gambling, video gaming and trading have all become commingled.  We have often noted that many of the newest crop of investors were sports gamblers frustrated by the lack of opportunities during the lockdowns.  Markets gave them a nearly infinite supply of daily action, with technology stocks attracting the bulk of new money.  Then, many new traders discovered that options offered them a generally similar payoff to gambling but with much lower transaction costs.  Like a sports or casino wager, an options buyer risks an initial premium with the hope of receiving a multiple of that premium in return.  Traders became enamored with options — particularly short-term, out-of-the-money calls with the highest decay – pushing volumes and open interest to new records.  Although there is the greatest opportunity for action in stock and options markets, unlike casinos they have defined opening and closing times.

While online gambling may fill that void, it is only available in certain jurisdictions.  Besides, even though many investors approach the two activities the same way, gambling sounds so much more unseemly than investing.  That is where Bitcoin comes in. 

Bitcoin is an investment, despite its quirks and gut-wrenchingly high volatility, but it shares many key similarities with multiplayer video gaming.  It exists only in a virtual world, accessed only through an app or similar portal, and available during whichever hours the player/investor chooses.  Most importantly, I believe that a significant number of young Bitcoin investors spent some portion of their youth playing multiplayer online games that require in-game currency.  Think of the parallels between the “gold farming” industry that sprung up in the late 1990’s and early 2000’s with the Bitcoin mining industry that exists today.  While Bitcoin mining is more sophisticated and less labor intensive than video game gold farming, in-game currencies often had real world values.  That made them analogous to today’s cryptocurrencies.  Either can be described as virtual currencies that could be utilized for real world purchases.  While this may be a new revelation to a (ahem) mature non-gamer, I can’t believe this similarity would be lost on the new generation of new cryptocurrency fans.

Today must be a sobering day for many Bitcoin fans.  A nearly 30% drop must be gut-wrenching, especially for those who have been sharing stories about their recent riches on social media.  As I wrote last week about Bitcoin and Tesla (TSLA), “Parabolic moves usually come to a nasty, unpredictable end.  But timing that result is nearly impossible, and the catalyst is often something trivial.”  Many experienced investors felt that there was a modicum of unsustainable euphoria in Bitcoin’s recent run, and the reason for today’s drop is murky at best.  That phrase fit uncannily.

Having said all this, there is still plenty of euphoria still present in today’s market.  While TSLA is down about 5% today, that is a small dip in light of its recent record 11 day upward streak.  TSLA’s chairman, Elon Musk, one of the most evangelical figures in investing, recently told his followers to use Signal for messaging, causing the unrelated Signal Advance (SIGL) to shoot from $0.60 on Wednesday to over $70 today (it is now about $29.50).  Read that again – it’s an unrelated stock with a similar name.  So, there is no shortage of speculative opportunities available to those who are willing to abandon conventional risk metrics, even with the jaw-dropping fall in Bitcoin.   I urge you never to abandon risk metrics though.

Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Interactive Brokers LLC, its affiliates, or its employees.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Disclosure: Digital Assets

Trading in digital assets, including cryptocurrencies, is especially risky and is only for individuals with a high risk tolerance and the financial ability to sustain losses. Eligibility to trade in digital asset products may vary based on jurisdiction.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at

trading top