Internet games can open crypto doors
With bitcoin prices fluctuating this year, it’s hard for less experienced investors to think about issues like crypto use.
Still, expanding the use case, including adding more industries and venues that will accept crypto as a form of payment, is integral to the long-term crypto investment thesis. In addition, the extended use case can provide support for crypto-correlated stocks and exchange-traded funds, such as VanEck Digital Transformation ETF (DAPP).
One frontier ripe with potential for more DAPP components is internet gaming, also known as iGaming or online casinos. While iGaming is a new concept in the US and is currently allowed in only a handful of states, it is very popular in a number of markets outside the US, including many where crypto adoption is high.
“Using blockchain transactions in iGaming significantly reduces payment processing costs and can potentially increase operators’ earnings before interest, taxes, depreciation and amortization (EBITDA) margins by as much as 8 ppts,” wrote Roth Capital analyst Edward Engel. “Over $3 billion in gross gaming revenue (~5% of global iGaming GGR) has already been wagered using crypto, and the regulatory landscape is improving both globally and in the US. Meanwhile, rapid growth in gray markets is fostering innovative solutions from large B2B -suppliers, and we see this accelerating adoption in white markets.”
In the US, states that allow iGaming and online sports betting do not currently allow crypto as a method of funding accounts. That may change over time, and some gaming companies are open to the idea. For example, DraftKings ( NASDAQ:DKNG ) CEO Jason Robins said last year that his company wants to accept crypto as a form of payment, but government regulators stand in the way.
In the countries that allow online casino operators to accept crypto, there are significant benefits, underscoring a potentially compelling intersection between crypto and betting.
“The benefits of accepting crypto deposits instead of traditional payment channels include 1) significantly lower payment processing costs, 2) transaction acceptance rates of 99.9%+, 3) instant withdrawals, and 4) negligible chargebacks. Given the advantages blockchain has over traditional payment channels, crypto deposits are more efficient and secure as they reduce reliance on third parties while facilitating ‘trustless’ transactions,” Engel added.
Currently, the main bet on the internet is allowed in crypto in the form of bitcoin or ether – the largest digital currencies. Should that remain the case, it could have long-term positive implications for DAPP components with links to these cryptocurrencies.
For more news, information and strategy, visit Crypto Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon and may not materialize. Information on this website should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any product.
