Bitcoin’s annual inflation rate is currently sitting at between 1.5% and 2% according to CoinMetrics. That very same rate was sitting above 4% in May 2020, just two months ago. That effectively cuts the rate by 50% in just 60 days, which is incredibly low. What does this mean for gamblers who choose to use Bitcoin betting?
Yes, the word inflation conjures up all kinds of convoluted images of economics professors talking about boring subjects most of us gamblers don’t understand, but answering the question above certainly does matter and there are certainly implications related to placing wagers with Bitcoin that gamblers will appreciate considering.
Lower Inflation Means More Betting Power for Gamblers
In economics and in gambling, lower inflation means more purchasing power. Especially in sports betting where gamblers actively shop for the best prices on a given event. The fact that a sports bettor can have 1% more purchasing power simply means not having to wager as much on the bet. That’s also true when playing table games but it probably makes more of a difference to the sharp sports bettors out there.
Bankrolls Grow in Value
Losing value to inflation is damaging to any currency even if it’s digital. The fact that Bitcoin’s rate of inflation is considerably lower than it was two months ago (and hopefully he continues to go down over time) means that it’s inherently more valuable to own Bitcoin. Consider for a moment that inflation rates almost never go down with national currencies tied to traditional banks. Using American dollars, Canadian dollars or any other fiat currency to gamble for that matter usually means your money is worth less every year.
On top of that, with governments printing off more and more money to provide stimulus to economies thanks to the coronavirus pandemic, the rate of inflation across North America, Europe and the world at large will continue to rise, which makes Bitcoin’s lower inflation rate even more attractive to investors and gamblers alike.
Bitcoin’s Low Inflation Makes Gambling in Altcoins More Attractive
Long-term, innovators running other blockchains will began to recognize that in order to make their projects attractive, they must compete with Bitcoin with regard to lower inflation rates. This particularly applies to altcoins competing as peer-to-peer payment networks or decentralized finance projects.
Nowadays there are altcoins that offer token holders the chance to earn dividends just for holding the token. Imagine having this token on a Bitcoin gambling site and earning interest on your bankroll even when you’re not making wagers. That’s more betting power!
Betting sites are likely still a long time away from offering all these different kinds of altcoins for purchase, but the point is, any increase in the value of Bitcoin (which includes a drop in the inflation rate) means that every other project gets a boost in the long run. It also means that developers and project founders alike have more of an incentive to come up with new and innovative ways to make gamblers happy.
Will Bitcoin’s Inflation Rate Continue to Drop?
A huge part of Bitcoin’s appeal and the reason so many gamblers use it is because purchasing power is not tied to a government. All transactions are on a public ledger called the blockchain and nobody can manipulate it. Since all of that is true, the inflation rate of Bitcoin is likely to drop significantly moving forward. It will take time, but nobody can artificially inflate it.
Whether or not the average gambler understands the in-depth economic principles at work on Bitcoin’s network, the point is that cryptocurrencies continue to rise in value over the years and that’s one gamble every gambler should want to take.