Why I Switched From Daily Fantasy Sports to Trading Cryptocurrencies

DFS is declining

I was an avid DFS (Daily Fantasy Sports) fan and participant, but now moved on to trading cryptocurrencies. The landscape with DFS has changed. The failed merger between Fanduel and DraftKings seemed to have surprised those two entities and their rake (essentially operating fee on each contest) has increased as they face pressure to continue seeking profits while more regulations start to hit that industry.

So I moved on from DraftKings to BitCoin.

Getting involved with BitCoin was honestly an accident. I had known about BitCoin since its creation, and like many others have regretted being involved with it thinking the ship had sailed. I had money remaining on a sports gambling website and wanted to withdraw it. The quickest method to withdraw was with BitCoin so I decided to give that a shot instead of handing the gambling website any more of my personal information.

It was deciding to withdraw my USD balance from that website into an equivalent amount of BitCoin that changed things. I was relatively new to BitCoin and didn't understand yet how to convert it back to USD and get the money in my bank account so I honestly forgot about it for about a week. After checking my BitCoin again, the balance of BitCoin had stayed the same, but its value in USD had grown 10%. I was shocked. My record with gambling and DFS was good, but not spectacular so 10% gains over a week was great. Since then, that same amount of BitCoin is now worth around 150% more. I was hooked.

How to get BitCoin

I signed up for a Coinbase account to start buying more BitCoin as an investment. From there, I started looking at exchanges as I had seen stories of people making more BitCoin by trading their BitCoin. It was this point, I realized that I could essentially gamble my usual DFS money by trading it with BitCoin. Why gamble with my USD when I wasn't a great gambler with sports, DFS rakes were increasing and by the time I got my money back from the gambling sites it would be worth less even if it were the same amount. Confused? If I put $100 aside right now, and come back in a few years I would probably be able to buy less with it.

If you are curious about CoinBase, I have posted my referral link here. Alternatively you can browse directly to their website if you prefer.

Now there is no guarantee USD or BitCoin will gain or lose value, it is important to understand the differences between the two as currencies. The key difference for this point is that there are constantly more USD created, and a very limited amount of BTC being created and eventually there will never be any more. There will only ever be 21 million coins. Even if you don't believe BitCoin is amazing, you have to agree that as a global item that anyone with internet has access too it is a very scarce item for a population of 7 billion. It only seems likely to increase in value over time.

How do you "gamble" with BitCoin

At this point I had determined I wanted to use BitCoin much more but how do you gamble with it if you are just trading it against the USD and not placing wagers on sports or casino games? This is where you get involved with exchanges. If you want more information on exchanges in regards to BitCoin, a good resource would be researching foreign currency exchange markets. You have probably heard in the news that the USD down against the EURO. It is the same thing with USD vs. BitCoin.

So, I knew I had to trade USD vs. BitCoin but only trading my small DFS budget per paycheck wasn't enough to gain what I was gaining on successful wagers on gambling sites. This is where margin trading comes in, and it is they key to gambling with BitCoin.

With margin trading you can turn your USD value of BitCoin in 2x or 3x the value on exchanges when trading. On other sites, you can go up to higher margins even up to 100x. This means that whatever amount of money you trade with 3x leverage the amount you profit is based on that 3x leverage amount. For example, if you 3x margin trade $100 worth of BitCoin at $300, if the price goes up 5% you gain the profits on the 5% of $300, $15. However, if you lose 5%, you are also down $15 from your original $100. Margin trading is a double edged sword but if you can wield it properly you can make huge profits, particularly with larger and larger margin.

The real concern with margin trading is what they call liquidation. This is the equivalent of not cashing in DFS, or losing your bet in sports gambling. Liquidation is when your margin trade has lost the amount of money that you invested in it, and your trade is liquidated, and you lose your money and your position on the trade (hence, losing the bet). The larger the margin you use, the quicker you can get liquidated on small movements. If you were to use a 100x leverage amount, the market would only have to move 1% in the opposite direction you like and you lose all of the money placed on the trade. This is why it can feel like gambling.

How to decide on where to place your money

However, trading BitCoin isn't just wild guesses that you hope pays off. Using Technical Analysis you can try to predict the moves that BitCoin will make. Similar to analyzing which player have the best matchups before rostering a DFS lineup, using technical analysis provides you with an opportunity to make an educated trade (or gamble).

Technical Analysis (TA) is not foolproof, just like every DFS matchup doesn't work out exactly like it looks like it should. However, using TA can give you much more confidence in making a trade. With your confidence in a TA pattern and correct use of leveraging you should be able to limit your losses, and maximize your gains. For example, if you are uncertain of the market you can use a small leverage like 2x and quickly get out of your position if the market moves in the wrong direction. Similarly if you are very confident in the direction of the market you can up your leverage and create large profits quickly. You just have to be careful when you are very confident that you do not get attached to your position and aren't afraid to accept your losses to avoid total liquidation.

So why did I switch to BitCoin trading?

1. BitCoin seems likely to continue gaining value.
2. I can manage my wagers much easier than gambling. I can get out with small losses when it looks certain I am wrong.
3. It is more predictable than sports gambling and DFS.
4. The action never ends.
   1. BitCoin is traded 24/7 globally. You don't have to wait for a new slate to start.
   2. You can take positions as often and as large as you like.
5. Trading on margin is an adrenaline rush at high levels.